Taxes
Not married or not civil partnered
If you and your partner live together as a couple, but are not married or not civil partnered, you are treated as two separate individuals. This makes a difference to how you are taxed. Married couples and civil partners have certain advantages because they are given tax exemptions (for Capital Gains Tax (CGT) and Inheritance Tax (IHT)).
As
an unmarried or uncivil partnered couple you may be liable for:
Captial
Gains Tax (CGT): This tax applies to the profit made
when one of your assets is 'disposed' of (sold or transferred
or given away). Everyone has a threshold of £9,200 (in 2007-08)
before this tax applies. If, as an unmarried couple or uncivil partnered couple, you make a transfer
of assets between you, once the threshold of £9,200 is exceeded
the tax applies.
and
Inheritance Tax (IHT): This is a complicated
tax which is not easily understood - even by some
'experts'! It applies to the value of an estate when
the owner dies. It is charged in two bands:- below
£300,000 (in 2007-08) is charged 0% tax. Any
assets above £300,000 are taxed at 40%.
More information
on inheritance, tax and living together can be found
in an Advicenow
guide.
Although it is not possible to avoid these taxes completely, if you are not married or are not civil partnered, there are ways of arranging your assets in such a way as to make your liability less. Consider taking advice from an accountant or solicitor about the best way of arranging your financial affairs.
Married or civil partnered
Inheritance
tax and Capital Gains Tax do not apply to married couples or to civil partners.
As a
married or civil partnered couple you can:
Transfer assets between you without having to pay Capital Gains Tax
and inherit assets from each other without having to pay Inheritance
Tax (which can be a large amount of money if a house is part of the
inheritance).
Tax credits
There are two types of tax credits: Working Tax Credit and Child Tax Credit.
Tax credits can provide extra financial support for eligible individuals and families, whether married, civil partnered or not. For more information, go to 'benefits'.
Useful contacts
HM Revenue & Customs
Inland
Revenue
National Insurance Helpline
If you have any questions about National Insurance call the National
Insurance helpline on 0845 302 1479. The lines are open Monday to
Friday 8am to 5pm.
Tax Credits Helpline
For information on Working Tax Credit and Child Tax Credit call 0845 300 3900 or textphone 0845 300 3909.
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