Reasons to get married

Although marriage rates may be the lowest on record, there are still significant benefits, particularly tax benefits, to ‘tying the knot’.  With Valentine’s Day fast approaching, leading Black Country law firm George Green LLP is reminding lovers to think about the practical benefits of getting married, as well as romance. 

“With 14^th February being one of the most popular days for people to ask their partner to marry them, there may be good reasons to take the plunge” says Clare Wiseman, Matrimonial Partner and Head of the Private Client at George Green LLP. 

“Cohabitation is becoming ever more popular at the expense of marriage, which hit rock bottom in 2012, with the lowest rates since they were first calculated in 1862,” says Ms Wiseman. 

“Many people who choose to live together still mistakenly believe in the notion of ‘common law’ marriage, but there is no such concept in law.  

People who have lived together for many years have few or no rights to each other’s property or estate on the death of one partner, and different laws apply when resolving the end of a cohabitation, as opposed to breakdown of a marriage. You should take steps to protect your position.” 

“Granted there are not as many immediate tax benefits as there once were, but if you are not married and your partner dies, you could end up losing your house, paying more tax or getting nothing from your partner’s estate.  

If you have lived with your partner for many years without marrying or going through a Civil Partnership and die without a will, although there is the possibility of your partner making a claim under the Inheritance (Provision for Family & Dependants) Act 1975 if insufficient provision has been made, other relations, including very distant ones, are more likely to end up receiving the bulk of your estate. 

If you and your partner own a house jointly, you should take advice on whether it is owned as ‘joint tenants’ or ‘tenants in common’, as the latter means that it will not automatically pass by survivorship.”

“Unmarried couples do not benefit from the same tax breaks as married couples or civil partners.  So even if you have a will, you may well end up paying inheritance tax.  Married couples and civil partners can benefit from ‘spouse exemption’ in addition to their respective ‘nil rate bands’, which means essentially that no tax whatsoever would be paid on assets passing to the surviving spouse on the first death.  In the case of a husband dying with personal wealth of £450,000, which he leaves to his wife, no tax is payable.  However, if they were not married, she would have to pay £50,000 in tax.” 

“Following a change in the law in 2007, it is also now possible to make use of a transferable ‘nil-rate band’. If spouse exemption has been used on the first death, the estate of the surviving spouse is likely to be swollen and this used to result in tax charges when passed to children.  However, the transferable nil rate band now allows the children to retrospectively claim nil-rates bands of both parents – thus saving tax.” 

“Gifts between spouses are also exempt from tax, so married couples and civil partners can preserve assets, for example for the purposes of mitigating capital gains tax.  This is especially relevant if one half of a married couple has more than one property or inherits property and subsequently decides to sell it.  Unmarried couples do not have this luxury and would need to make use of their annual allowance of £10,600 and/or pay Capital Gains Tax.” 

If the most romantic period of the year cannot persuade people to get married, rather than just living together, Ms Wiseman advises them to consult their solicitor for advice on the legal aspects of co-habitation. 

“Marriage confers certain rights, benefits and protections automatically, which many people have come to believe are gained by unmarried couples over time.  This is not the case.  Any safeguarding of goods and property from others and ownership rights in the event of the cohabitation ending need to take the form of a specific legal agreement,” concludes Ms Wiseman.