If you're considering tying the knot, you may be encouraged to find out that married couples (and civil partners), can be entitled to a number of tax breaks which cohabiting couples aren't able to claim.
With marriage allowance, couples can transfer up to £1,060 of their personal allowance to their partner. If you have unused personal allowance (£10,600 for 2015/16), you can transfer this unused allowance to your partner, thus reducing the amount of income tax they have to pay. This is, assuming that your partner is a basic rate taxpayer (income between £10,601 - £42,385). If you've earned less than £9,000 you can transfer the maximum amount of £1,060, which will save around £212 in tax. If you earn more than £9,000 you can only transfer a portion of your remaining allowance.
Marriage allowance was made available from the 6th April 2015. To find out if you're eligible you can register directly on the HMRC website.
Married Couple’s Allowance
If you or your partner were born before the 5th April 1935, you may be eligible for 'married couples allowance'. Find out more in our 'Guide To Tax – Married Couple's Allowance'
Marriage may be seen as an outdated institution, but if offers certain legal securities that cohabiting couples don't get. The main points to be aware of are:
- Cohabiting couples don't qualify for marriage allowance, or married couple's allowance
- There is no automatic 'right of inheritance' for the surviving partner
- Without a will, relatives rather than partners inherit your estate
- There are no tax breaks for capital gains and inheritance tax when transferring assets between partners
- You can't claim any reliefs that are available to widows or widowers
Separated or Divorced couples
You aren't required to pay tax on any payments made or received under a maintenance agreement
If you or your ex-partner were born before 6th April 1935, you can claim relief on any maintenance payments you make. The most you can claim on is £3,220, or the amount you've actually paid – whichever is the lower amount. Relief is given at a rate of 10% reduction in your annual tax bill, thus maximising reduction of £322 for the 2015-16 tax year.