To wonder why there isn’t public outrage about this?

[Blusterylimp]

If a couple isn’t married but own their property between them, the surviving one will need to pay inheritance tax on their partners half of the house (and other assets) if they die.
Effectively they will lose their home to pay the IHT unless they also have huge savings.
How can that be allowed in this day and age when so many couples cohabit without getting married?

Reasons against marriage might be that if you have more assets than him and would rather risk IHT. Divorce might be expensive for you. Also, if you want to make sure your money goes to your children (and not his if he has more later) - perhaps someone more knowledgeable can shed light?

You can use the unused NRB of someone you were widowed by up to a maximum of x2 NRB. This applies even if you remarry and your spouse also dies.

Is that what you are asking?

Just write a Will and use a life interest trust to ring fence any assets you definitely want to go to your own kids but which allows the survivor to live in the house for life.

Marriage does confer legal inheritance rights so you probably can't just leave a spouse out of your Will entirely (depends on circumstances/their own wealth etc) so you just use a trust to protect the assets and half the house.

A Will is the solution to most of the legal issues raised in this thread.

It was a reference to "first death" in the post above. @metoooverhere not sure if you were being serious but it just meant the NRB transfers when the first person in the couple dies

I have no idea what an NRB is.

I don't know what NRB means but the advice was "If you are married, it passes tax free to a spouse on first death and then the survivor pays 100% of the tax (but can use any unused nil rate bands of the first to die)."

So I interpret that as tax free to the surviving spouse and then the survivor pays 100% of the tax. Does not compute!

Nil Rate Band. It's currently set at £325,000 per person. This means you can give away £325,000 of assets to a non-exempt beneficiary (partner, kids etc) without Inheritance tax (IHT). After that your estate is taxed at 40%.

Thank you. So then type of ownership doesn't matter - whether Joint T or T in common?

A spouse is an "exempt" beneficiary from an Iht perspective. So gifts to a spouse pass tax free. Usually everything is left to your spouse.

This would mean a surviving spouse would end up with 100% of your combined assets.

On their death they pay all the IHT on both estates. But they can use the unused Nil Rate Bands of the first to die as well as their own to offset the tax bill.

It doesn't matter from an IHT perspective.

It does matter if you want to leave your share of the house by your Will to someone other than the other joint owner.

Apologies, thecpost you replied to said "If you are married, it passes tax free to a spouse on first death" and you then asked how many times your spouse can die. I wasn't sure if you were making a joke about "first death" of a person or asking a serious question

NRB = nil rate band, which is £325k per person (+ extra for main residence) and transfers to the surviving spouse upon the first death in the couple.

Important point. The "extra for main residence" is the Residential Nil Rate Band of £175,000 per person. This is for a parent/grandparent leaving a house to a descendant. It is transferable between married couples so a survivor can have £350,000 RNRB to offset against a tax bill.

However, your RNRB (not transferable between unmarried couples) is lost if you are unmarried and leave your house to your partner (or the partner is joint tenants so owns 100%) even if the whole house then goes to to your own kids after the survivor dies. So the survivor will only have £175,000 RNRB.to offset against a tax bill.

Can’t you only get a civil partnership if you’re gay? I know Boris said he was going to change that, but then Covid happened and I didn’t think anything happened with it?

It happened in 2019.

It’s not penalising unmarried couples, it’s treating them consistently and fairly - they don’t have to share assets in life, so why treat them as though they are as one in death? Besides which, on that logic, marriage is a tool to not generate money, so your earlier post is wrong on the basis of your own analysis.

Or they could take the very simple step advised many times on this thread and each unmarried partner can take out a life assurance policy. On the death of the first partner, the life assurance policy pays out to the partner and that covers the inheritance tax. The other thing mentioned many times is that you can agree with HMRC to pay the tax over a ten-year period.

And the final thing to say is that people who inherit a £600k house are going to be far better off than the majority of the population, even if they do have to re-mortgage or pay interest to HMRC to cover inheritance tax of a few thousand pounds. I find it hard to believe that many unmarried partners are going to be forced to sell up and move to the other end of the country because of inheritance tax.

People who inherit half of a £600k house as an unmarried partner aren't going to have to pay inheritance tax anyway. The minimum property value where this becomes an issue is £650k.

If a couple jointly own a £1m property and are so committed to being unmarried that they aren't willing to spend £200 on a civil partnership then they can take out insurance to cover the IHT due. Or they can plan to downsize (how many single people living along really require or can upkeep £1m worth of house anyway?). But most people aren't exactly going to find it a tragedy that someone owning a £1m asset outright has to pay some inheritance tax. Especially since they're in the top 5% of the country in terms of asset wealth.

Yes - that’s my point, you can’t force someone to sign a financial contract with you. Having a child with someone while morally a big commitment isn’t legally a big financial commitment in the UK unfortunately

It's true, there are so many options open to people in this situation to protect themselves. Multiple institutions, or private insurance policies for those who don't want the state involved. It's not an outrage in the slightest.

@Donsyb yeo definitely happened and as I said upthread is pared down to pretty much as much as it can be - you have to give notice and you have to sign in person in front of witnesses - to avoid bigamy/visa scams etc. The rights afforded by it are such that it cannot and shouldn’t be done without being in person etc

then as I and others have also said if you don’t want to get married get insurance policy out - that is all the OP needs to do get to solve her problems.

CP/Marriage has a lot of benefits but also does combine assets - you don’t want that you can get some of the benefits or offset (such as this one with insurance)

what you can’t do is expect an advantage like this which is combined your tax allowances and not pay whilst keeping the rest separate

The legal minimums for marriage/civil partnership aren't much greater than those for other binding contracts - you have to get witnesses for wills, powers of attorney etc. The only real difference is you have to give notice and do the signing in a specific place in front of an official. The cost isn't greater than a passport each.

Although (rightly) yiu have to be in front of a registrar for it (as you do for affidavits and stuff when it has to be notasrised)

I did mention that you have to be in front of an official. But the desire to just 'fill in a form on the internet' doesn't apply to the vast majority of official documents because they have to be witnessed.

Exactly!

Yeah. If you can just fill in a form on the internet, what's to stop me marrying a rich man without his consent