Despite today being the most romantic day of the year, the UK’s personal tax system has inconsistencies when it comes to promoting the institution of marriage, according to Nimesh Shah, a partner at London based accounting, tax and advisery practice Blick Rothenberg.
Despite the previous Prime Minister David Cameron’s claim that the introduction of the ‘marriage allowance’ would act as a catalyst for preserving marriage in modern Britain the take-up has been low, Mr Shah said and the allowance was “worth very little in real terms and it has been costly to administer for HMRC.”
“There are certain longstanding tax benefits of marriage, such as capital gains tax free transfer of assets and the spousal exemption for inheritance tax, which allows assets to pass to the surviving spouse free from inheritance tax,” he explained.
However, Mr Shah said that when it came to buying or selling a property, being married is unlikely to be of benefit.
For example, for the purposes of the three percent Stamp Duty Land Tax (SDLT), a married couple is treated as one person; therefore, a married couple would be subject to the higher SDLT cost if either owns another residential property, and the couple is not replacing their main residence.
“This may not be the case if the couple is unmarried and one of the couple does not own another residential property,” warned Mr Shah. “Similarly, a married couple can only have one main residence for capital gains tax purposes.”
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