The UK’s personal tax system has inconsistencies when it comes to promoting the institution of marriage, says Nimesh Shah, a partner at Blick Rothenberg.
Nimesh said, ‘David Cameron proclaimed the introduction of the “marriage allowance” would act as a catalyst for preserving marriage in modern Britain. However, the take-up has been low, the allowance is worth very little in real terms and it has been costly to administer for HM Revenue & Customs.
‘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 added, ‘However, when it comes to buying or selling a property, being married is unlikely to be of benefit. For example, for the purposes of the 3% 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. Similarly, a married couple can only have one main residence for capital gains tax purposes.’
For more information, please contact Nimesh Shah.