Are there any tax benefits of getting married?

As someone that has very recently had the pleasure of walking down the aisle, the constant question that nags us all is:

marriage-300x180“Are there any tax benefits of getting married?”

Ok, I agree that is possibly the last thing on people’s minds, though it is a question that is commonly asked.

Though there are no explicit tax breaks for married couples it would be wrong to state that there are “no” benefits at all.

Inheritance tax

It is common for unmarried couples to jointly own a property. Cohabiting couples with assets in excess of £650,000 may be subject to inheritance tax at 40% in the event of one of them passing away. This is as a result of each individual may have up to £325,000 worth of assets that can be transferred free of inheritance tax on their death to non-spouses – this is called the nil rate band.

The above is not the case for married couples, as assets left to a spouse is exempt from inheritance tax and in addition the unused element of the nil rate band of £325,000 is transferred to the surviving spouse meaning the amount of £650,000 worth of the surviving partner’s death estate may not be liable to inheritance tax.

Capital Gains Tax

A key point is that married couples can transfer assets between each other without being subject to capital gains tax.  As a result of this, married couples can transfer assets to each other freely to ensure that the capital gains annual exemption of £10,900 is fully utilised on the subsequent sale, for example on a rental property that is owned by one of the married couple prior to a sale of this property, half of the ownership can be transferred to the their spouse meaning upon sale of the property the married couple can fully utilise the capital gains exemption of £21,800.

Other areas to consider

Married couples allowance applies when one of the married couple was 65 before 6 April 2000 when the universal married couples allowance was withdrawn. I unfortunately do not qualify for this though following planning for the wedding I do feel as if I have aged substantially.

The above are some minor points to consider when considering the advantages of getting married, though it goes without saying that telling your partner that the reason for your proposal was due to the fantastic tax benefits may leave you with no tax benefits and no wedding!!

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