COMMENT
The Financial Benefits Of The Civil Partnership Act

December 5th will be a landmark day for many couples in the UK. People in same-sex relationships will finally be able to claim pretty much the same rights and responsibilities as married couples by registering their status as a couple under the terms of the Civil Partnership Act.

If you want to register a civil partnership, you'll be able to give formal notice of your of intention to do so from that date although you won't be able to proceed with the formal ceremony until 21st December. As with marriage, there's a 15-day waiting period once each person has given notice of intention to register his or her partnership.

The benefits are that civil partners will be treated the same as married couples for employment and certain pension benefits and for tax purposes.

This means that when a registered partner dies, there'll be no liability for Inheritance Tax on assets left to the surviving partner. At the moment, if a same-sex partner dies leaving more than £275,000 worth of assets, the taxman will help himself to 40% of everything over and above that and that has led to the surviving partner being forced to sell their home to cover the bill. This will no longer apply for registered partners. And for those who fail to make Wills, surviving partners will have the same legal recognition under the intestacy rules as married couples.

Couples in a civil partnership will also be able to transfer assets between them without any Capital Gains Tax implications. Everyone is entitled to realise profits of £8,500 a year before having to pay CGT so by some judicious transferring of assets such as shares, you can make use of your partner's CGT allowance as well as your own. Registered partners will, however, only be allowed to claim one main residence between them for CGT purposes whereas currently they can claim one each.

If one partner is in a higher tax bracket than the other, s/he will be able to transfer investments to the lower earner to save tax on any resulting income such as interest on savings or dividends on shares.

The process for dissolving the partnership will work along the same lines as it does for married couples, Partners will have similar rights and responsibilities, for example, a duty to provide reasonable maintenance for your civil partner and any children of the family.

However, there may be penalties too whether same-sex couples register their partnership or not. Currently, both married and unmarried opposite-sex couples claiming means-tested benefits are required to make claims based on their joint income - the same will apply to all same-sex couples living together from December 5th. This could mean a reduction, for example, in tax credits, income support, Housing Benefit and Jobseekers Allowance for some couples who, hitherto, could claim on the basis of their sole income.