Financial Considerations of a Civil Partnership

Unless gay couples choose to formalise their relationship by entering into a civil partnership the parties face serious financial difficulties if a will has not been executed. In the absence of a civil partnership or a will, a surviving partner would have no rights over a shared home. A civil partnership places gay couples in the same position as heterosexual partners or spouses.

The creation of a civil partnership will revoke any existing will, just as marriage does. It also allows same sex couples to be treated in the same way as married couples; this means that assets can be transferred on death and afforded the same exemptions for inheritance tax and capital gains tax. We can provide legal advice on all financial aspects of entering a civil partnership.

Entering into a civil partnership will revoke an existing Will so if you register a civil partnership you will need to make a new one. The change of status from a single person to a civil partner is likely to have a wide-ranging impact on your financial planning. It would be well worth taking specialist advice on how entering into a civil partnership will affect you.

One of the biggest advantages of civil partnership for many couples is that they will be treated in the same way as married couples for tax purposes – they will be able to transfer assets between them without liability for Capital Gains Tax and, most significantly, will be exempt from Inheritance Tax if one partner dies and leaves their home to their partner – this will put an end to the distressing situation where the bereaved partner is often forced to sell their family home shortly after their partner’s death in order to pay the tax bill. However all the rules which prevent husbands and wives from avoiding tax liability will also apply to civil partners and so financial and tax planning will be important for those with capital assets and property.

The provisions under the Civil Partnership Act 2004 make dealing with the finances of civil partners upon dissolution similar to dividing matrimonial finances. When considering the breakdown of a Civil Partnership the Court will make a determination of what a fair division of the assets should be. The Court will consider the following:

The court has a wide discretion when the decision is made as to a fair settlement of the assets and the first consideration of the court will be to the welfare of any minor child of the family.

For legal advice regarding any aspect of a Civil Partnership please contact, Pauline Troy:

t: 020 8603 1757

m: 07917 784620

For details of all the legal services that we can offer our clients see www.blackfords.com or telephone 020 8686 6232.