Getting Married UK — Financial Planning

Wedding Budget (UK 2025)

Average UK wedding cost (2024 Hitched/Bridebook surveys): £20,700. Realistic budgets:

• Registry office + small reception: £2,000-£5,000
• Mid-range UK wedding (50-80 guests): £15,000-£25,000
• Larger wedding (100+ guests): £25,000-£40,000
• Top venues (London, country houses): £50,000+

Major budget categories: venue (~40%), catering (~25%), photography (~10%), dress/suit (~5%), flowers (~5%), other (~15%).

Marriage Allowance — £252/Year, Backdate Four Years

If one partner earns below the £12,570 Personal Allowance and the other is a basic-rate taxpayer, you can transfer £1,260 of unused allowance to save £252/year (20% × £1,260). The claim can be backdated up to four tax years, recovering up to £1,260 as a single lump-sum refund if you have been eligible throughout. Apply through the Personal Tax Account at gov.uk/marriage-allowance — the process takes ten minutes and HMRC re-issues both tax codes within a fortnight.

Eligibility excludes: higher- or additional-rate taxpayers as the receiver; both partners earning over £12,570; couples not legally married or in a civil partnership. The Allowance is one of the most overlooked benefits in the UK — HMRC estimates 1 million eligible couples have never claimed. See our Marriage Allowance Guide.

Joint vs Individual Taxation — UK Reality

Unlike the United States, the UK does not offer a joint tax return for married couples. Each spouse remains a separate taxpayer with their own Personal Allowance, savings allowance (£1,000 basic / £500 higher / £0 additional), dividend allowance (£500 from 2024/25) and CGT annual exempt amount (£3,000 from 2024/25). Marriage does not bundle these together.

Tax planning therefore focuses on asset placement: shifting income-producing assets to the lower-earning spouse so their bands and allowances are used; making sure both partners use their full ISA allowance (£20,000 each = £40,000 per couple per year); ensuring both spouses contribute enough to their pensions to use higher-rate relief if available. Joint accounts can be useful for budgeting but they don't change income-tax treatment.

Spousal Tax Exemptions

• CGT: transfers between spouses are no gain, no loss — completely exempt. Useful for rebalancing investment portfolios to use both annual exempt amounts.
• IHT: unlimited transfers between UK-domiciled spouses during life or on death, plus unused NRB/RNRB passes to survivor (combined up to £1m).
• Income shifting: gift income-producing assets to lower-earning spouse to use their tax allowances and lower bands.
• ISA inheritance: surviving spouse gets the Additional Permitted Subscription allowance — keeps deceased spouse's ISA money in a tax wrapper.

IHT Spousal Exemption and the £1m Combined NRB

Every UK individual has a £325,000 Inheritance Tax Nil Rate Band (NRB) and a £175,000 Residence Nil Rate Band (RNRB) where the family home is left to direct descendants. Both bands have been frozen until April 2028 (extended in the 2025 Spring Statement to April 2030). For an individual the combined allowance is £500,000.

Marriage doubles this. Transfers between UK-domiciled spouses are completely IHT-exempt, and any unused NRB/RNRB on the first death is transferable to the survivor. The result: a married couple can leave up to £1,000,000 to their children IHT-free, provided the family home is included and worth at least £350,000. Above £2,000,000 net estate the RNRB tapers away by £1 for every £2, so very wealthy couples lose some of the £350,000 portion.

For unmarried partners the spousal exemption does not apply. Every transfer between them is potentially taxable above the individual's NRB. This is one of the most expensive tax distinctions between married and unmarried couples in UK law.

ISA Inheritance and the Additional Permitted Subscription

When an ISA holder dies, the surviving spouse or civil partner inherits an Additional Permitted Subscription (APS) equal to the value of the deceased's ISA holdings on the date of death or the date the ISA was closed, whichever is higher. This APS is on top of the survivor's normal £20,000 annual ISA allowance.

Example: if your spouse held £180,000 in ISAs at death, you receive an APS of £180,000. You then have three years from death (or 180 days from probate) to subscribe that amount into a new ISA, retaining the tax-free wrapper. Without marriage or civil partnership the inherited money loses its ISA status and any future growth is taxable. The APS is per spouse — both partners can pass their full ISA pot forward to the survivor.

Pension Nominations: Update Immediately After Marriage

Pension death benefits sit outside the estate and are paid at trustee discretion guided by the most recent Expression of Wish form. If you nominated a parent, sibling or ex-partner before marriage and do not update, the trustees may follow that nomination. Update every workplace pension, every SIPP, any death-in-service cover and any standalone life insurance trust. Five minutes of paperwork avoids years of distress and potential trust litigation if the marriage was recent.

The Cohabiting Common-Law Myth

In England and Wales, the term "common-law spouse" has no legal meaning. Living together for any length of time, even with joint children and joint mortgage, confers no automatic property rights, no automatic inheritance, no IHT spouse exemption, no ISA APS, no Marriage Allowance, no widow's pension entitlement and no automatic next-of-kin status in hospitals.

If one partner dies intestate, the survivor inherits nothing under statutory intestacy — the deceased's parents and siblings rank ahead. If the relationship ends, asset division follows strict legal title with no equivalent of the matrimonial sharing principle. Cohabiting couples should consider: a Declaration of Trust over the family home setting out beneficial ownership; a cohabitation agreement; mirror wills; and pension nominations expressly naming the partner.

Scotland gives modest cohabitation rights under the Family Law (Scotland) Act 2006 but is still far from marriage. Civil partnership remains the only practical legal route to the full bundle of spousal tax and inheritance protections.

Civil Partnership: Identical Tax Treatment Since 2019

The Civil Partnership Act 2004 created civil partnerships for same-sex couples, and the Civil Partnership (Opposite-sex Couples) Regulations 2019 extended the option to opposite-sex couples. For tax purposes — Marriage Allowance, IHT exemption, ISA APS, CGT no-gain-no-loss transfers, pension survivor benefits and intestacy rules — civil partnerships are identical to marriage. Couples who prefer the legal protections without the cultural connotations of marriage have a fully equivalent option.

Joint Mortgages

Joint mortgages combine both incomes — lenders typically lend up to 4-4.5× joint salary. Two earners on £40k each can borrow ~£320k vs £160k for one person. Both partners are jointly and severally liable — each fully liable for the entire debt. Choose between joint tenancy (both own the whole, survivor inherits automatically) and tenants in common (defined percentage shares, can leave your share by will) — the choice has IHT and intestacy consequences.

Critical Admin To-Do

1. Update HMRC via Personal Tax Account — name change, address.
2. Apply for Marriage Allowance if eligible — backdate four years if applicable.
3. Write new wills — getting married AUTOMATICALLY revokes existing wills under English law (not Scottish).
4. Update bank accounts, pensions, life insurance beneficiaries.
5. Review joint accounts and finances — discuss strategy openly and consider a financial plan together.
6. Update DVLA, passport, electoral roll.
7. Consider pre-nup if significant pre-marriage assets — increasingly persuasive in UK courts since Radmacher v Granatino [2010] although still not strictly binding.

References

• gov.uk: Marriage Allowance
• gov.uk: Passing on a home (IHT and the RNRB)
• gov.uk: ISAs after a spouse's death (APS)
• gov.uk: Intestacy rules
• gov.uk: Marriages and civil partnerships