MONEY COMMENT
Marriage Has Its Benefits

By Jane Mack (TMFJane)
December 30, 2003

A few years ago, after a very long-term relationship, some friends of mine reluctantly decided to get married. The reason was because she became pregnant and he discovered that he would have no legal rights as the father, unless the baby was born inside marriage. Until this point, they had seen no reason to bother with a wedding - they were committed enough as far as they were concerned - so they did it for purely practical reasons.

I was rather amused to discover the other day that, although they absolutely adore each other, they still don't like the fact that they're married! So I tried to console the poor things by pointing out a couple of the tax benefits that married couples enjoy.

If one of them dies, there is no liability for Inheritance Tax on assets left to the surviving spouse. At the moment, if you die leaving more than £255,000 worth of assets, the taxman will help himself to 40% of everything over and above that. This doesn't apply to assets that you leave to your spouse.

What's more, they can transfer assets between them without any Capital Gains Tax implications. Everyone is entitled to realise profits of £7,900 a year before having to pay CGT so, by some judicious transferring of assets such as shares, you can make use of your spouse's CGT allowance as well as your own.

Unfortunately, this news did nothing to cheer them up, as they don't own enough to fall into either the Inheritance Tax or the Capital Gains Tax bracket! Oh, well - I tried.

Learn more in our Tax centre.