What changes to your tax when you get married or form a civil partnership in the UK?

Full answer

Getting married or forming a civil partnership does not automatically change your tax position -- but it does create several valuable tax planning opportunities. **1. Marriage Allowance** If one spouse or civil partner earns below the Personal Allowance (£12,570) and the other is a basic-rate taxpayer (income between £12,570 and £50,270): - The lower earner can transfer **£1,260** of their Personal Allowance to the higher earner - This reduces the higher earner's tax bill by **£252/year** - Cannot be used if either partner pays higher or additional rate tax - Backdatable up to 4 years (worth up to £1,008 in a lump sum) **2. Inheritance Tax (IHT)** Transfers between spouses and civil partners are **completely exempt** from IHT, regardless of amount: - No £325,000 nil-rate band limit applies to inter-spousal gifts - On death, any unused nil-rate band (up to £325,000) and residence nil-rate band (up to £175,000) transfer to the surviving spouse, potentially doubling the allowance to £1,000,000 - This exemption does not apply to unmarried partners **3. Capital Gains Tax** Transfers of assets between spouses and civil partners during a tax year are made on a **no gain, no loss basis**: - No CGT is triggered on the transfer itself - The recipient takes over the original acquisition cost of the asset - This allows spouses to distribute gains across two Annual Exempt Amounts (£3,000 each = £6,000 combined) and two sets of lower-rate bands **4. Pension** Defined benefit pensions often provide a widow/widower's pension -- marriage typically activates or improves death benefits. **Administrative steps** - Notify HMRC of your marriage via your Personal Tax Account or by phone - If you change your name, update HMRC, your employer (for PAYE), your pension provider, and your bank - Apply for Marriage Allowance at gov.uk/marriage-allowance

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