Popping the question this Valentine’s Day or beyond could make your life richer in both love and money. Marriage may leave couples “significantly better off over time.” The marriage allowance allows people to transfer £1,260 of their Personal Allowance to their spouse, lowering the higher earner’s annual tax bill by up to £252. Married couples and civil partners can transfer assets to each other without incurring a tax bill. They also have more protection in terms of inheritance. There are additional benefits such as shared pension and death in service payments. However, the decline in marriage rates could be due to the rising costs of weddings.
Say it with taxes: the financial benefits of getting married
Marriage is “on the decline”, said The Independent’s Helen Coffey, after latest data from the Office for National Statistics showed that, for the first time on record, fewer than 50% of over-16s in England and Wales were wed or in a civil partnership. The drop could be down to “cold, hard cash”, as wedding costs soar. Yet after the wedding has been paid for, said Unbiased, marriage may leave couples “significantly better off over time”.
The marriage allowance lets people transfer £1,260 of their Personal Allowance to their spouse or civil partner if they earn more. Claiming the allowance can lower the higher earner’s annual tax bill by up to £252. To qualify, couples must be married or in a civil partnership, with one partner earning less than the Personal Allowance and the other being a basic-rate taxpayer earning below £50,270 a year (or £43,662 in Scotland).
Shared tax allowances
Married couples and civil partners can transfer assets to each other without incurring a tax bill, which can save on capital gains tax. In terms of inheritance, married couples have more protection when one partner dies as their entire estate will automatically be left to the spouse. Money or assets passed on to a spouse are also free from inheritance tax. Spouses can combine their inheritance tax allowances when they pass away, potentially saving their heirs thousands of pounds in taxes.
In addition to tax benefits, married couples can also access shared pension payments and death in service payments. Married couples can have some form of their pension paid out to their spouse when they die, while death in service payments can also be offered to married partners. Unmarried partners may not be entitled to these payments.
Marriage can bring financial benefits, including tax breaks, shared tax allowances, and inheritance protection. The marriage allowance allows the transfer of Personal Allowance to a spouse, lowering the higher earner’s tax bill. Married couples can also transfer assets without incurring a tax bill, and spouses have more protection in terms of inheritance. They can also access shared pension and death in service payments. However, the decline in marriage rates may be due to the rising costs of weddings.