Posted on 24.5.18
Christine Thonrley, Partner and Head of Wills, Trust and Probate at Gorvins, has been featured in The Sun providing expert comment for their article on how The number of Brits getting married is at an all-time low but could getting tying the knot make financial sense?
Following the royal wedding The Sun has found a growing indifference to marriage within the population. The article discusses the financial considerations to think about before getting married as the latest research shows the number of British people tying the knot is at an all-time low. As marriage declines, there has also been a rise in the number of cohabiting couples. As many as 3.3million couples are living together without being married or in a civil partnership — more than double the number of a decade ago, according to the Office for National Statistics. But whether you marry or not, there are financial risks.
Christian comments on inheritance tax and how married people or civil partners can leave everything to each other on death without paying any inheritance tax. And there is no such perk for those who just live together. If you die unmarried, your partner may have to sell off your home to meet the bill for inheritance tax. The tax is payable if the value of your estate – home, car, jewellery and so on – adds up to more than £325,000. Anything above this is taxed at 40 per cent.
People who own properties also get to pass on an extra £125,000. So, currently the allowance for a single person is £450,000. Both the £325,000 general allowance and £125,000 property allowance are transferable between married couples, which means any unused allowance can roll over to the surviving spouse. Then when the second person dies, they can leave a bigger cash sum to their children or grandkids.
It means this tax year, married couples with a main residence worth at least £250,000 will be able to leave a total estate of £900,000 to children or grandchildren before any inheritance tax is liable.
Christine comments: “With a nil rate band of £325,000 and the ability to use an extra allowance of £125,000 if you leave your home to your children, wealthy co-habiting couples could pay over £180,000 more inheritance tax than a married couple in the same situation.”