Marriage-lite Will really help protect couples’ cash?
OPPOSITE-SEX partners can now be legally united in a civil partnership — affording them rights and financial benefits long enjoyed by married couples.
Experts say co-habiting couples often mistakenly believe they are protected by so-called ‘ common law marriages’, but these do not exist.
For those couples who do not want to get married, a civil partnership can now provide many of the benefits and tax breaks that a husband and wife currently enjoy.
Denise Lester, solicitor and family law specialist from McCormacks Law, says: ‘Civil partnerships formalise relationships in law. This means you will get certain financial and property protections both during and after death or dissolution.’
Julie Thorpe, 61, and Keith Lomax, 70, from near Hebden Bridge, West Yorkshire, were among the first heterosexual couples to form civil partnerships yesterday.
The couple, who have been together for 37 years and have three children, said having equality with married couples under the law, in respect of financial and legal affairs, was the tipping point which helped them decide to take the plunge.
It comes after a long legal battle against the law, which had allowed just same- sex couples to form civil partnerships since 2005.
The law change means around 84,000 civil partnership ceremonies will now take place in England and Wales this year, the Government estimates.
Here Money Mail explains what it would mean for your money:
1. HOW DO YOU GET A CIVIL PARTNERSHIP?
TO REGISTER for a civil partnership, you first need to give notice at your local register office — at a cost of around £35 each (£70 per couple).
If there are no objections, then you can register your civil partnership after 28 days and print a certificate for an outlay of £11.
Should you want to dissolve a civil partnership, you and your partner will need to apply to court at a cost of £550 — the same cost as filing for divorce. You cannot do this until the partnership is at least one year old.
2. WHAT WILL HAPPEN WHEN ONE OF US DIES?
IF ANYONE in a civil partnership dies without making a will, the other will automatically inherit their estate — including their home if they own it. They will also be exempt from paying inheritance tax.
This is the same with married couples. Those outside of a marriage or civil partnership do not automatically inherit anything unless they are specifically named in a will or they had joint ownership of a property.
If your civil partner dies and you are under the state pension age, you should be eligible for Bereavement Support Payment. This will consist of a lump sum of £2,500, or £3,500 if you have children, and a further 18 monthly payments of £100 (£350 if you’re eligible for Child Benefit).
3. WHAT DOES IT MEAN FOR CHILDREN?
IF YOU have a child together, you will need to re-register their birth so they are on record as a ‘child of marriage’. This is same with parents who get married and means you will have to pay for a new birth certificate at a cost of £11. If your partner has a child who is not your own, you will become a step-parent when you enter a civil partnership. But unlike a marriage, a civil partnership will not give you parental responsibilities automatically. You have to apply for a parental responsibility order or enter into a parental responsibility agreement signed and witnessed at your local county or family court. A child has no right to inherit from a step-parent unless they have adopted them or provided for them in a will.
4. ARE THERE ANY BENEFITS OR TAX RELIEF?
AS CIVIL partners, you’ll be entitled to the Marriage Allowance. This means you can transfer up to £1,250 of your personal allowance to your civil partner.
You need to be a non-taxpayer and your partner needs to be a basic taxpayer, earning less than £50,000. This can reduce their bill by up to £250 every tax year.
Civil partners can also transfer assets, such as property, between each other without paying Capital Gains Tax — which can be up to 28 pc for higher taxpayers when selling property.
You can claim the spouse exemption as long as you are living together.
When it comes to most benefits, including Universal Credit and Child Benefit, you will be treated in the same way — whether you are civil partners or simply living together.
However, there are different rules for different benefits, so it is worth checking the Citizen’s Advice website for more information is citizensadvice.org. uk/benefits/
5. CLAIMING PENSIONS AND LIFE INSURANCE
IF YOU are married or in a civil partnership and do not qualify for a state pension, you may be able to claim part of one based on your partner’s National Insurance contributions.
Workplace pension schemes are legally obliged to offer the same benefits to civil partners as married partners. Some private schemes also have to do this, although it is worth checking with your own provider.
If your civil partnership is dissolved, you will be entitled to a share of your ex-partners occupational or private pension. If you die, your surviving civil partner may also be entitled to a share of your pension.
Death benefits and life insurance payouts may also automatically be passed on to a civil partner, whereas co-habiting couples would have to nominate their partner as a beneficiary before they could receive the money. But you should always check with your policy provider.
6. WHAT ABOUT PROPERTY INHERITANCE?
BOTH civil partners have a right to remain in a home if either of them own it. This is called ‘home rights’. If you end your civil partnership, this may change, depending on what the court orders.
Civil partners, like married couples, can also pass on their home in their estate to their partner if they die — again without facing inheritance tax.