UK Tax advantages and obligations as Married couples and Civil Partnerships

This article will delve into the tax advantages and obligations of couples legally classified as “Married” and “Civil Partnerships”. 

 For tax purposes in the UK, a civil partnership is now treated the same in law, as a marriage.

 There are a number of tax reliefs civil partners and married couples can benefit from, we have summarised the main points below.

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Benefits for both Civil Partnership and Marriage 

Marriage Allowance

 Marriage Allowance allows a tax paying partner to transfer the tax year's personal allowance amount to a spouse who has not made over the personal allowance.

 Transfer of the blind person’s allowance

 The Blind Persons Allowance is available to those registered as blind, or whose eyesight hinders performance at work or in day-to-day life. This allowance can sometimes be transferred to a spouse tax free.

Transferring Assets with no Capital Gains 

 Certain assets can be transferred between spouses tax free. This can enable more efficient tax planning. 

 Child benefit 

Couples are entitled to transfer 10% of unused personal allowance from the lower to the higher income spouse (provided they are not a higher rate taxpayer).

Principle of private residence (PPR)

A Principal Private Residence (PPR) is a house or apartment which you own and occupy as your only, or main, residence. PPRs are exempt from CGT upon sale for the entire period of ownership, you: lived in it as your main residence. used all the property as your home. Married couples and Civil Partnerships are only allowed to have one PPR between them. 

If both individuals within the relationship own a property, an election will be required as to which property will be treated as the couple's main home for PPR purposes.

You can nominate one property as your main home by writing to HM Revenue and Customs (HMRC). Include the address of the home you want to nominate. All the owners of the property must sign the letter.

For overseas properties, you can nominate the property as long as you have lived in the property for at least 90 days during the tax year.

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