One of the most significant pieces of social legislation is set to be introduced by the government by the end of this year. From Monday 5th December 2005, same-sex couples will be able to form a civil partnership giving them the same rights and responsibilities as married couples.
Under this Act, the first civil partnership can be registered on 21st December enabling couples to transfer assets between themselves with no more tax liability than married couples. A civil partnership gives same-sex partners the same rights over property, maintenance, and pensions. In advance of this new legislation, Steele Raymond LLP has been advising clients on tax and will planning to take effect from December.
Chartered Tax Adviser at Steele Raymond LLP, Kurt Lee, says; “The purpose of this Act is that there should be no difference between civil partners and married couples for financial purposes. Civil partners will be able to transfer assets between each other during their life-times tax free and, upon the death of one partner, civil partners will pay no inheritance tax on property passing to the other. The same tax planning possibilities will exist as currently only apply to married couples.
Couples rushing to sign up for civil partnership need to be aware, however, that there will also be certain tax disadvantages. In particular, unregistered same-sex couples can enjoy main residence relief against capital gains tax on two separate properties. Civil partners can only claim one on main residence.”
He adds; “One crucial point about the civil partnership is that registration will invalidate an existing will. Couples planning to register their partnerships should therefore arrange for new wills to be prepared as a priority.”
The managing director of a Dorset advertising firm in a long-term lesbian relationship, comments; "It is time for same sex couples committing to each other to enjoy the legal recognition that any long term relationship deserves - by way of their children, in life and after the death of their partner. This change in position, which is effectively a marriage, will clarify the needs and wishes of many lesbian and gay couples that at present sadly go completely unrecognised. It is real progress, albeit well overdue in comparison with much of Europe".
For further information on getting the best tax planning out of a civil partnership please contact Kurt Lee or Paul Causton at Steele Raymond LLP on 01202 885211.
