Tax Implications for Marriages/Civil Partnerships
Caught up in the whirlwind of wedding preparations, the ceremony itself and the wonderful novelty of your new marital status, it is understandable, perhaps, that tax is not high on your agenda. But spare a thought, as tax issues can arise out of this new coupling and opportunities can be missed.
For example, Parents should be encouraged to give you wedding gifts, on or shortly before the great day, of up to £5,000 each. This could immediately save your mum and dad Inheritance Tax of up to £4,000 between the two of them. Grandparents can join in the fun with gifts of up to £2,500 each receiving the same immediate Inheritance Tax break.
This is a major change in your life, so your Will should be revisited, or one done if not already the case, to take account of this new found status. Did you have two separate residences prior to getting married? Are you intending to use both as residences going forward?
For example, Mary’s flat in London is to be used by her during the working week, whilst at weekends, the newlyweds, Ian and Mary reside in his flat in Canterbury. If so, Mary and Ian need to make an election within two years of marriage to choose, for Capital Gains Tax relief purposes, which one is their main residence. Miss the boat and HMRC make the choice.
Is one of you a 40%/45% taxpayer (41%/46% in Scotland) and the other is not? If either of you have children from a previous relationship could this result in the higher earner being hit for a tax charge on the child benefit the household might receive? Is it feasible to restructure the income and capital base between the pair of you to improve your overall tax position? For example, bring your spouse into the business or transfer rental properties in whole or in part to your other half. By sparing a thought for tax now, it can only help to keep the spark of marital bliss alive!
How marriage or a civil partnership will impact upon you, your partner and children from a tax perspective should be looked at by way of a marital/civil partnership review taking account of your personal circumstances. We are happy to provide such a review. Contact us on 01484 685413 or email firstname.lastname@example.org