Why Marriage (or Civil Partnership) Still Matters—Financially Speaking
No, I’m not becoming a registrar. But when it comes to Wills, Tax, and planning for later life, marriage—or civil partnership—can make a massive financial difference.
Since I wrote this article, changes in Inheritance Tax have made living together as common law husband and wife (husband and husband or wife and wife) even more hazardous with relatively modest homes being at risk.
Let me tell you what the potential issue is: it involves sensible financial planning being turned on its head by Rachel Reeves. Whilst a decent pension pot is just sound financial planning, it will from 2027 be added to the value of your assets for IHT purposes. For an unmarried couple, death in service benefits will also be taxed. I can see the non-widow being made homeless due to IHT being due on pensions she will never see, and arguments over who should pay what.
Let me show you why tying the knot (or converting a long-term partnership) might just be the smartest financial move you make. I thank Martin Lewis for his article which inspired me.
👬 Everything here applies to civil partnerships as well as marriages.
1. Up to £1,257 in Marriage Allowance (and backdated cash too)
If one of you earns under the tax threshold and the other’s a basic-rate taxpayer, you can share a bit of the tax-free allowance. That saves the taxpayer up to £251.40 a year—every year.
You can also back-claim four years, which could bring in up to £1,006 in refunds. That’s a total of £1,258, just for sorting your paperwork.
👉 Just Google “Marriage Allowance” or check the MoneySavingExpert guide for a simple walkthrough.
2. Spouses don’t pay Inheritance Tax on what you leave them.
Anything you leave your spouse or civil partner is exempt from Inheritance Tax. No bills, no stress. Their is no such thing as a Common Law Spouse as far as the Taxman and the Courts are concerned.
Unmarried? Even if there is a Will, your partner might face a hefty tax—and in some cases, even lose their home to pay it.
3. You can pass on your unused Inheritance Tax allowance
You get a £325,000 allowance, plus £175,000 if your home’s going to children or grandchildren. If you leave everything to your spouse, you don’t use those allowances, and they roll over.
That means when they pass, your combined estate can pass on up to £1 million tax-free.
4. You can move savings and investments between you
Married couples can transfer money, savings, and assets to each other without triggering tax.
So if one of you doesn’t pay tax (e.g. retired or stay-at-home parent), shift interest-earning savings to them. It’s perfectly legal and highly effective.
5. Double your Capital Gains Tax allowance
You each get a £3,000 capital gains tax allowance. Transfer part of the asset to your spouse before selling, and you could double the tax-free gain.
Plus, if they’re a basic-rate taxpayer, the tax rate may be lower too.
6. More protection if things go wrong
If things don’t work out, marriage gives far more legal protection than cohabiting, especially if one partner is financially vulnerable.
That includes spousal maintenance, pension sharing, and a fairer division of assets.
7. Potentially more State Pension if your spouse dies
This mostly affects people who reached State Pension age before 6 April 2016.
If your spouse dies, you may be entitled to extra pension based on their contributions—unless you remarry before reaching pension age.
8. You can inherit your spouse’s ISA allowance
If your spouse had £30,000 in ISAs, you can inherit their ISA allowance—on top of your own.
You don’t even need to inherit the ISA itself—just being married or in a civil partnership is enough.
9. No Will + Unmarried = Limited rights
If your partner dies without a Will and you’re unmarried, the law might treat you as a stranger. You may get nothing, including the home. Inevitably, there will be a dispute, and if it goes to Court then you may well end up bankrupted by the legal fees.
Married couples have more protection—but everyone should have a valid Will.
⚠️ If you marry, your current Will is cancelled (unless made in a specific way) — so make a new one straight away or at least let me check it free.
WARNING: second marriages where there are children of a previous relationship require very carefully constructed Wills if the ultimate beneits are to be shared by both sides.
The Bottom Line
If you’re in a long-term relationship, own a home, or have children together, getting married or civil partnered could save thousands and protect your partner from serious trouble. But Wills and Lasting Powers of Attorney are essential if you want to look after each other.
If you want to understand how this affects your Will, tax planning, or Lasting Powers of Attorney, I’d be happy to help.
Let’s Get Your Affairs in Order—Properly
If you’re not sure how marriage or civil partnership affects your estate planning, let’s have a no-pressure chat.
📞 Call me on 01323 766766 📧 Or use the Contact form. 🏠 I am based in Polegate with easy parking.
You’ve worked hard for what you’ve got. Let’s make sure it stays in the right hands.
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