Important considerations for unmarried couples on inheritance tax

Ricky Gervais considers marriage to avoid inheritance tax: important considerations for unmarried couples

Comedian Ricky Gervais has had his say on marrying his long-standing partner of over 40 years following considerations of inheritance tax. Despite being together for such a long period of time, their estates will not benefit from being exempt from inheritance tax. 

Inheritance Tax and Unmarried Couples

Inheritance tax is currently charged at 40% of the value of a deceased’s assets following the deduction of any available allowances and reductions. In the UK, spouses can benefit from spousal exemption which means that the transfer of assets between spouses or civil partners are exempt from inheritance tax. 

Despite some unmarried couples being long standing partners and cohabitees for several years, this exemption is not available. This means that the surviving partner would have to follow the normal rules for paying inheritance tax.

The Intestacy Rules and Unmarried Couples

In situations where there is no Will, there is also a common misconception around cohabiting, unmarried couples being entitled to their partner’s estate. 

Without a valid Will in place, an individual’s estate passes under the laws of intestacy. Under these laws, unmarried partners are bypassed and the deceased’s children would benefit in the first instance. 

If there are no children, the estate would pass to other family members like parents and siblings. It is only when a couple is married, that the spouse will benefit in the first instance. 

Further Considerations

Whilst an unmarried partner would not benefit in the first instance, when a couple have been co-habiting for more than two years, the surviving partner would be eligible to bring a claim under the Inheritance (Provision for Family and Dependants) Act 1975. It must be noted that there is no guarantee of success of bringing a claim. 

Generally, marriage will revoke an existing Will. Any Will made can be in contemplation of marriage, meaning that the terms of your Will will stand and not be revoked should you decide to marry in the future. 

If you require specific inheritance tax advice or wish to make a Will, our Private Client Team can assist you.

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