Civil partnerships and tax

[Lootman]

So one of my sons has announced that he is entering into a civil partnership (CP) with his girlfriend. I think she wanted marriage, he wanted no change and so this is the compromise.

Anyway he proudly told me that a CP comes with all the tax benefits of marriage. Seems to me it won't make much difference to income tax or capital gains tax, since they are assessed separately in any event. But there are advantages for transferring cash and assets between each other as they would not be tax events. And IHT savings upon the first death, although that is hopefully a long way off for both of them.

There would be some opportunities for "parking" income in the name of the partner with the lower income.

From what I have read this all seems reasonable. But does anyone have actual experience of CPs? Are there any tax snags or gothchas for the unwary?

[bluedonkey]

For tax purposes, it is identical to marriage. If I was to try and think of possible disadvantages compared to not being in a CP/marriage, then it would be the ramifications of divorce, split of assets, etc.

[Lootman]

For tax purposes, it is identical to marriage. If I was to try and think of possible disadvantages compared to not being in a CP/marriage, then it would be the ramifications of divorce, split of assets, etc.

Thank you. Yes, although he told me that a CP is easier to leave than a divorce. For instance a CP requires that both partners share the same principal residence, which is not a criterion for marriage. So presumably if they decided to live apart at some point the CP might be considered to no longer apply.

Another non-tax issue is that a CP does not invalidate a Will but a marriage does. Again, according to my son.

[Gerry557]

I thought CPs were effectively the same as a marriage without the church side of things or vows.

So it will only be the usual marriage gotchas anyway.

[DaveE101]

Another non-tax issue is that a CP does not invalidate a Will but a marriage does. Again, according to my son.

A quick google confirms this is NOT correct. Any existing will is revoked the same as with marriage.

David

[Dod101]

I thought CPs were effectively the same as a marriage without the church side of things or vows.

So it will only be the usual marriage gotchas anyway.

A marriage does not require 'the church side of things'. A registrar I would have thought conducts more marriage ceremonies than any clergyman/woman these days.

Dod

[genou]

Another non-tax issue is that a CP does not invalidate a Will but a marriage does. Again, according to my son.

A quick google confirms this is NOT correct. Any existing will is revoked the same as with marriage.

David

I think Lootman is in England, but for completeness, Scottish law is different. Wills survive subsequent marriage. Although if you get divorced, any inter-spouse gift in a will falls away automatically. I looked and the same is true for a CP.

[Lootman]

A quick google confirms this is NOT correct. Any existing will is revoked the same as with marriage.

I think Lootman is in England, but for completeness, Scottish law is different. Wills survive subsequent marriage. Although if you get divorced, any inter-spouse gift in a will falls away automatically. I looked and the same is true for a CP.

Yes, England. I think anyone entering a CP (or marriage) should and would make a new Will immediately anyway. And again in the event that the CP or marriage ends. That way there is no ambiguity.

In my son's case he intends that all assets and accounts will be held as joint tenants with his partner, wherever that is possible, so much of the Will would be moot anyway.