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05th October 2018

Civil Partnerships for Heterosexual Couples

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Theresa May has announced that all couples in England and Wales will be able to choose to have a civil partnership, instead of marriage, after the Supreme Court held it is unlawful that opposite sex couples don’t have the same right to choose. Many opposite sex couples have religious or emotional objections to “marriage” but would like the commitment and legal protections of a civil partnership.

Civil partnerships were created under the Civil Partnership Act 2004 and gave same sex couples similar legal and financial protection to a marriage. Since 2014, same sex couples have been able to choose whether to marry or to enter into a civil partnership.

A civil partnership is a document signed by both parties giving their relationship a legal status with similar legal rights to marriage. It provides legal and financial protection for both parties during the relationship and also in the event of the relationship ending by the death of one of the parties, or a breakdown in the relationship.

These include:

  • Making gifts free of inheritance tax between spouses or civil partners.
  • Using their partner’s nil rate bands (ordinary and residence) on the survivor’s death
  • Pension rights, which do not necessarily pass to those not in a marriage or civil partnership.
  • Rights under intestacy laws where there is no Will. For deaths after the 1st October 2014, where there are no children, the surviving spouse or civil partner receives everything. Where there are children, the surviving spouse or civil partner receives all of the personal chattels, a statutory legacy of £250,000, plus interest from the date of death, and half of the residuary estate.

Under intestacy rules, where there is no spouse or civil partner, all assets held in the deceased’s sole name pass to other family members and the surviving partner has no right to any of the assets.  Pension companies may not be contractually required to pay anything to  surviving partners of the deceased who were not married or in civil partnerships.

It is estimated there are over 3.3 million unmarried couples in the UK who live together with shared financial responsibilities with nearly half of them having children. Those couples are vulnerable because they do not have the same legal protections as those in a civil partnership or marriage. So a lot of same sex couples may start planning a civil partnership.

When planning a marriage, or a civil partnership, it is worth remembering that any Will made before entering a civil partnership or marriage is automatically cancelled, unless there is a statement that the Will is made in anticipation of the civil partnership or marriage. In these situations, it is best to get legal advice.

At the current time, Theresa May has only backed civil partnerships for opposite sex couples. There has also been a call for siblings to be able to enter into a civil partnership.

Siblings who own a home together and live together, are unable to make gifts to each other without considering inheritance tax implications. That includes allowing their sibling to continue to live in the house after the first one dies. Where they have an estate over their available nil rate band, inheritance tax is charged at 40% which may cause the home that they share to have to be sold in order to pay for tax due, potentially leaving the surviving sibling homeless. Conservative MP Sir Edward Leigh has campaigned for siblings who have lived together to also be able to benefit from a civil partnership. He has previously backed a Bill put forward by Lord Lexden for this. Under his proposals, which are due to go to the House of Lords committee, siblings should be able to enter into a civil partnership where they are aged over 30 and have lived together continuously for 12 years (to prevent it being used for last minute tax planning purposes as opposed to supporting a genuine long term co-dependency arrangement).

If you would like advice regarding your Will or estate planning, or in dealing with the administration of an estate, please do not hesitate to contact Alexandra Howard, Solicitor, on 01223 447422 or click here to email Alexandra.