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How very civil

Rebecca Steinfeld and Charles Keidan have persuaded the UK Supreme Court that current English law barring opposite-sex couples from forming legal civil partnerships is incompatible with Article 14 and Article 8 of the European Convention on Human Rights.  However, the Court has no power to declare the existing law in the Civil Partnerships Act 2004 invalid.

We thought this an opportune moment to remind readers of some of the taxation implications of marriage and civil partnership.

Transfers between spouses and civil partners are normally wholly exempt from inheritance tax and that treatment continues until the issue of the decree absolute.

The capital gains tax treatment is subtly different.  Transfers between spouses and civil partners take place on a no gain/no loss basis but that treatment is afforded only up to the end of the tax year of separation.

For income tax purposes a spouse or civil partner who is not using all of his or her personal allowance can transfer part to the other, provided he or she is no more than a basic rate taxpayer.

It should be remembered that celebrating a marriage or registering a civil partnership will revoke an existing Will, unless it has been made in specific contemplation of the event.

Divorce does not revoke a Will in its entirety: the appointment as executor of the ex is nullified, as are any gifts in favour of the ex.

In the absence of a valid Will, under the intestacy rules a surviving spouse or civil partner will inherit everything absolutely if there are no children. Where there are children, the survivor will take the deceased’s chattels, a statutory legacy of £250,000 and one-half of the rest outright.

Finally, do remember that in England & Wales there is no such thing as a common law spouse and there hasn’t been since Lord Hardwicke’s Marriage Act of 1753!

For more information, please get in touch with your usual BKL contact or use our enquiry form.

Terry Jordan

Senior Adviser, Private Client

T +44 (0)20 8922 9360
E terry.jordan@bkl.co.uk

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