Weddings and funerals are inextricably linked – by tax.
When a couple get married, they are already having an impact on how much inheritance tax they will pay. Each and every person is entitled to a nil rate band of £325,000. If the full nil rate band is available, this means that the first £325,000 of any deceased’s estate incurs inheritance tax at 0%. The value of the estate in excess of the nil rate band is taxed at 40%. However, if married or in a civil partnership, the surviving spouse takes the assets from the deceased spouse exempt from inheritance tax (so long as both are UK-domiciled). Moreover, as a result of the introduction of the transferable nil rate band or threshold by the Finance Act 2008, the deceased’s nil rate band is available to the estate of the surviving spouse (or civil partner). This makes a potential total of £650,000 of the survivor’s estate that is taxed at 0%.
The planned introduction of same sex marriages in March 2014 will introduce a new basis on which the transferable nil rate band can arise.
Remember, however, that it is necessary that all the requirements of a legally valid marriage or civil partnership be met in order for the transferable nil rate band to apply. Couples tying the knot abroad need to be aware that some marriage ceremonies conducted abroad may not form a valid marriage contract under UK law.
Disclaimer: While we do all that is possible in terms of ensuring its accuracy, this blog contains general information only. Nothing in these pages constitutes legal advice. You need to consult a suitably qualified lawyer from the firm on any specific legal problem or matter.