What is a civil partnership?
Couples in a civil partnership benefit from the same rights and protections as their married counterparts. However, it is free of religious connotations and ideas of ownership, making it an attractive option for those for want to legally commit to each other in a less traditional manner.
What benefits does a civil partnership offer?
There are a host of reasons why a couple might opt for a civil partnership, but one of the main reasons is the financial security it offers.
Income tax – Civil partners are entitled to the same income tax allowance as married couples.
Inheritance tax – Civil partners are completely exempt from inheritance tax should they inherit their partner’s estate. The surviving civil partner can also effectively double the amount that they can leave to family and friends without having to pay inheritance tax, by transferring the first to die’s unused nil rate band.
ISAs – Civil partners can inherit their partner’s tax-free ISA allowance, by using the Additional Permitted Subscription (APS).
Transfer of capital assets – These transactions become tax neutral for civil partners, allowing them to move funds and assets between them without generating an immediate charge to capital gains tax.
Pensions – Private and occupational pension schemes offer the same rights to civil and married partners. The surviving partner may be able to claim a higher state retirement pension, based on the first to die’s national insurance contributions.
However, for those wishing to enter into a civil partnership, there are still administrative tasks that must be completed, such as the drafting of new wills and other documents. Assets should also be considered and advice surrounding prenuptial agreements should be sought.
Get In Contact
Matt works with individuals and their families to help them negotiate the many pitfalls they can encounter when planning for their future by providing pragmatic, bespoke advice.