Are there financial benefits to being married?

Claire Scott

Claire Scott


It is hard to ignore the fact that Valentine’s Day is fast approaching, encouraging us to surprise our chosen valentine with gestures of love and affection.  All going well and you’re lucky enough to snap up your valentine, the next steps could be engagement and then marriage. 

As my partner and I have chosen to follow the latter route, it made me think, from a financial planning point of view; what are the benefits of being married?

What are the financial benefits of being married?

  • Married couples allowance: Couples, including those in a civil partnership, could reduce their tax bill by £326 to £844.50 (2017/18) a year. To qualify, one must be a non-tax payer and the other must be a basic-rate tax payer.  This allowance can be backdated to April 2015.
  • Capital gains tax: Married couples and civil partners can reduce Capital Gains Tax (CGT) liability by transferring assets between themselves without triggering a CGT charge. Thus allowing couples to take advantage of their individual annual CGT exemptions.
  • Inheritance tax breaks: Married couples and civil partners can pass assets to their other half completely free of Inheritance Tax (IHT) when they die. Any remaining Nil Rate Band is also passed to the surviving spouse which effectively doubles the IHT allowance to £650,000, but not for co-habiting couples. 

This could rise to £1m over the next few years if they pass a property to their children.

  • ISA savings: Couples can now inherit their partner’s ISA savings.  In effect the spouse or civil partner is entitled to an additional ISA allowance equal to the value of their partner’s ISA at date of death which is added to their annual ISA limit. 
  • Defined benefit pension problems:  A lot of defined benefit pension schemes will only pay a pension to the surviving spouse or civil partner and not to cohabiting partners.
  • Wills and break ups: Cohabiting couples have no automatic right to a partner’s estate.  If there is no will in place, the estate could go to other family members.  Again, co-habiting couples have fewer rights on separation, even if couples were in a long-term relationship or had children together.

Until rules change to include co-habiting couples, the above benefits are worth considering.

It’s important to realise as circumstances change, different aspects of your life will take priority.  We at Johnston Carmichael Wealth are here to help you Live Life on Your Terms.

Disclaimer: While all possible care is taken in the completion of this blog, no responsibility for loss occasioned by any person acting or refraining from action as a result of the information contained in this blog.
This blog represents our interpretation of current and proposed legislation and HMRC practice as at the date of publication. These may change in future. All statements concerning the tax treatment of products and their benefits are based upon our understanding of current tax law and HMRC practices both of which are subject to change in the future. Levels and bases of reliefs from taxation are also subject to change, and are dependent on your individual circumstances. Nothing in this blog constitutes advice to undertake a transaction and professional advice. Johnston Carmichael Wealth Limited is authorised and regulated by the Financial Conduct Authority.