Inheritance tax planning for unmarried couples

14th February 2018

On Valentine’s Day, you might say there is no more a romantic way to say ‘I love you’ than a marriage proposal, however Marie Tisdale, wills and probate lawyer at Ansons Solicitors in Staffordshire says that making sure that your loved ones do not pay too much inheritance tax is even more romantic!

“Whatever your marital status, if you are in a long-term relationship, making sure that your loved ones are provided for after you die should be a priority” says Marie.

Unfortunately, unmarried couples who are living together and maybe have jointly owned assets do not have the same inheritance tax reliefs available to them as a couple who are married or in a civil partnership. There is a common misconception that the rules that apply to married couples also apply to cohabiting couples and this is simply not the case,” she adds.

While getting married is the best form of inheritance tax planning, if you have decided not to marry and continue to live together as a cohabiting couple instead, it is important that you understand your legal position.

According to the Office of National Statistics, there are 3.3 million unmarried cohabiting couples in the UK. If you’re one of them, you should consider making your wills and taking inheritance tax planning advice on your individual circumstances.

Every individual has an inheritance tax nil rate band of £325,000.  When one of an unmarried couple dies this nil rate band is applied to the value of their estate.  If the value of the estate exceeds £325,000 then the excess is taxed at 40 per cent.  This rule applies even if the whole of their estate is left to their surviving partner in their will. The inheritance tax is paid before the estate passes to the survivor.

Compare this to a married couple or civil partnership where on the first death, the estate passes to the survivor inheritance tax free and their nil rate band remains unused.  Upon the second death this unused nil rate band can be combined with the nil rate band of the second to die, thereby increasing the reliefs available to the second estate of up to £650,000 for tax year 2017/2018.  Often this means that the combined estate on the second death does not pay any inheritance tax.

Without sensible inheritance tax planning measures, unmarried cohabiting couples could face an inheritance tax bill on the first and the second death. It is important to get independent tax planning and legal advice to decide what is the best course of action in your circumstances.  It is also a good idea to make wills that mirror each other to ensure that your assets pass as you both wish, and you make reasonable financial provision for each other.

It is important to remember that a marriage will revoke any wills made before that date. Therefore, if as a couple you already have wills and would like the same terms after your marriage, then you will need to re-sign your wills after you have got married.  You can make your wills before marriage, but they must be worded correctly to ensure that your marriage does not revoke them. You should review your wills with a lawyer.

If you would like more information on inheritance tax planning, or making a will contact Marie Tisdale, director and head of wills and probate at Ansons Solicitors on 01543 267981, or email

The contents of this article are for the purposes of general awareness only.  They do not purport to constitute legal or professional advice.  The law may have changed since this article was published.  Readers should not act on the basis of the information included and should take appropriate professional advice upon their own particular circumstances.