Unmarried couples to qualify for spousal tax breaks

In a landmark decision, the Supreme Court has ruled that discriminating on the basis of sexual orientation, or a decision to live together rather than marry, is a breach of human rights.

Presently, couples need to be in a formal civil partnership or married to be able to claim the raft of tax benefits available. These advantages include:

  • Transfers of chargeable assets between civil partners and married couples is free of capital gains tax and inheritance tax.
  • In appropriate circumstances spare personal allowances can be transferred from one partner to the other.

In the case taken to the Supreme Court, a heterosexual couple who had decided not to marry considered that denial of rights given to same sex couples (via civil partnership arrangements), and married partners, was an infringement of their basic human rights, and the Supreme Court agreed.

Readers interested in this topic can watch a video recording of the Court’s decision here: https://www.youtube.com/watch?v=Ehyuer1AxFw

Although the case does not directly impact changes to the tax system it will be interesting to see how the government responds to this ruling. It would be a fairly simple matter to grant heterosexual couples to right to enter into a civil partnership, and therefore gain access to the present tax status of same-sex civil partners and married couples.

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