How inheritance tax impacts unmarried couples

For couples who are married or in a civil partnership, one partner can leave their entire estate to their partner without the estate being subject to inheritance tax. However, the rules are different for unmarried couples, as our blog explains…

How inheritance tax impacts unmarried couples


Have you thought about how your partner would cope financially, after you pass away? Death is a difficult subject for many people, however it’s worth thinking about, especially if you are unmarried and not in a civil partnership. The laws around inheritance, and any tax payable on that inheritance, work differently depending on whether partners are married or not.

For married couples or those in a civil partnership, it’s fairly straightforward. Presuming the entire estate is left to the remaining spouse, there is no inheritance tax(IHT) to pay. However, for unmarried couples, and couples not in a civil partnership, it’s a little more complex.

We’ve explored what a bereaved partner is entitled to inherit in two scenarios where the couple is unmarried. We hope you find it useful.  


Scenario 1: unmarried, no civil partnership –partner dies WITH a Will

In this scenario, the deceased wishes to leave their entire estate to their partner. They make this known through their Will.

If the deceased’s estate is over the IHT threshold, then inheritance tax on the portion over the threshold must be paid. This is because an unmarried couple cannot benefit from the IHT spousal exemption in the same way a married couple can. Currently, the IHT threshold is £325,000.

Even though there is no marriage or civil partnership, the surviving partner would inherit their partner’s assets because the Will left instructions to this effect.  


Scenario 2: unmarried, no civil partnership – partner dies WITHOUT a Will

If a person dies without a Will, they are said to have died intestate. This means that the deceased’s assets and property cannot simply be divided by the next of kin or surviving partners. The estate must be administered through the courts in a process known as ‘probate’.

Under the intestacy rules, the surviving partner has no right to inherit any of the deceased’s cash, property or assets. There are no guarantees that the court-appointed administrator will award the surviving partner anything.


The importance of a Will for unmarried couples

Not everyone wishes to marry or be in a civil partnership; it’s a personal choice that doesn’t suit everyone. However, most people wish to ensure their loved ones are comfortable after their death. The only way for unmarried couples to ensure that their partner receives anything upon their death, is to write a Will expressing those wishes.


We’re here to answer your questions

There’s no need to be afraid; with careful planning you can leave your estate to the people you love, regardless of your marital status. It’s important to think carefully about your wishes and put them in writing with a Will, so that this can happen. We understand that there are many different family and relationship configurations that can make inheritance tax complicated; not every scenario is as clear cut as those above. If you’re worried about the future, give us a call on 0117 279 5507– we’d be happy to help.

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