The Ring and the Riches: The Surprising Financial Perks of Marriage in the UK
Let’s be honest, nobody gets down on one knee and proposes because of tax brackets. We marry for love, companionship, and the shared goal of building a life together.
But, once the confetti has settled and the honeymoon is over, it’s worth knowing that in the eyes of HMRC and UK law, "I do" means a lot more than just a romantic gesture. While cohabiting couples are the fastest-growing family type in the UK, they still lack many of the legal and financial safety nets that married couples (or civil partners) enjoy automatically.
It might not be romantic, but understanding the "marriage premium" can make a significant difference to your joint wealth over a lifetime. Here is a look at the key financial benefits of tying the knot in the UK.
1. The Marriage Allowance: An Immediate Tax Boost
This is the most immediate perk for many couples. The Marriage Allowance is designed to help couples where one partner is a low earner or a non-taxpayer.
If one of you earns below the Personal Allowance threshold (£12,570 for the 2024/25 tax year) and the other partner is a basic-rate taxpayer (earning between £12,571 and £50,270), the lower earner can transfer 10% of their personal allowance to their spouse
.
That transfer is worth £1,260, which translates to a tax saving of up to £252 a year for the higher-earning partner. It’s effectively free money if you qualify, yet thousands of eligible couples fail to claim it.
2. Inheritance Tax (IHT) Superpowers
Nobody likes thinking about the end, but marriage provides immense security here.
If you aren't married and your partner dies leaving everything to you, you could face a hefty Inheritance Tax bill if their estate is over the threshold (£325,000).
If you are married, assets passed between spouses are generally exempt from IHT, regardless of value. Furthermore, when the second spouse eventually dies, they can "inherit" their deceased partner’s unused nil-rate band. This means a married couple can effectively pass on up to £650,000 (or up to £1 million if including the residence nil-rate band for a family home) completely tax-free.
3. Smarter Investing and Savings
Being married allows you to juggle assets to be more tax-efficient.
- Capital Gains Tax (CGT): You can transfer assets (like shares or a second property) to your spouse without triggering CGT. This allows you to utilise both your annual CGT allowances before selling an asset, potentially doubling your tax-free profit.
- Inheriting ISAs: If your spouse dies, you receive an "Additional Permitted Subscription." This allows you to inherit their accumulated ISA allowance on top of your own, keeping their nest egg tax-free forever.
The Verdict
Marriage certainly isn't a financial cure-all, and it comes with its own legal responsibilities. However, the UK system is currently set up to reward legal commitment with tax efficiency and long-term security that cohabiting just doesn’t match. Love may be all you need, but a few tax breaks act as very nice icing on the wedding cake.
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