Civil Partnerships

THE CIVIL PARTNERSHIP ACT - WHAT IS IT?

The Civil Partnership Act 2004 - legislation which recognises the legal rights of same-sex couples - became law on 5th December 2005. Now, same-sex couples prepared to undertake the necessary steps to form a Civil Partnership will have a new legal status, that of “Civil Partner”, and will then qualify for many of the same legal and financial rights that married, heterosexual couples have always enjoyed.

CIVIL PARTNERSHIP - WHO IS ELIGIBLE?

U.K. Civil Partnerships are available to couples who are: both of the same sex; not already in a Civil Partnership or Marriage; 16 years of age or older (with parental consent if under 18); not closely related, (e.g. parent, sibling, niece, uncle, etc.,).

WHAT WAS WRONG WITH THE OLD SYSTEM?

Quite simply, couples in same-sex relationships had no automatic rights under Law, however long they had been together! This often led to considerable emotional upset and financial hardship. For example, upon one partner’s death, the survivor could be legally excluded from the funeral by the deceased’s family or, having no status in tax law, could lose their jointly owned home because of Inheritance Tax.

WHAT HAS CHANGED?

Practically everything! If you enter into a Civil Partnership, you will have the same rights - and the same legal and financial responsibilities - as a married couple in areas like tax, social security, inheritance and pensions. If you would like to know more, please click on the Civil Partnership link on the right and we will be happy to send you a detailed explanation; or contact us for an individual discussion.

WILLS AND TAX PLANNING

Civil Partners can now take advantage of the same tax breaks that traditional married couples have always enjoyed. For example, they can leave each other as much as they like without suffering a damaging Inheritance Tax bill at first death. They can also make new Wills incorporating Nil Rate Band trusts and IOUs so that the eventual tax bill at second death is much lower. At current rates, this would save up to £124,800. (see also here).

This is a totally new tax-planning opportunity for same-sex couples, but it is essential to seek specialist advice to make sure that it will work for you.

C. J. H. Consultancy Services have an in depth understanding of the new Act and its implications. Contact us now to discuss the best course of action in your individual circumstances.

QUICK LINKS:
ABOUT THE ACT | WHO IS ELIGIBLE | WHAT'S CHANGED?
WILLS AND TAX-PLANNING | FURTHER INFORMATION

Please contact us now for a NO OBLIGATION discussion to assess your individual circumstances >>

Further information

For more information please select a free e-leaflet from the list below and we will e-mail it to you.

Why make a Will? - our Estate Planning Guide
Safeguarding your home against creditors – the best way to own your home together
The Nil Rate Band Trust and how you can save up to £124,800
Guides for Executors, Attorneys and Probate and Guidance Notes following Bereavement.
The Civil Partnership Act
Advance Directives ("Living Wills")
Business Healthcheck and Succession Planning
Conveyancing and Property Purchase or Sale

Whatever your situation and concerns, we can help you to use the Law to your advantage.

Further Information:

We work closely with other Professional Advisers and are pleased to recommend the services of colleagues known to us. Please click on our link button above for further information.
If you would like information on any particular individual or practice, please Contact us for additional information.

WILLS & ESTATE PLANNING

ARE YOU MARRIED?

If so, don't assume that everything will pass automatically to your spouse at death. If you haven't made a Will, the Law decides how your possessions will be distributed, sometimes at the expense of your intended beneficiaries.

If you have children, the surviving spouse would only get the first £125,000 outright and a life interest in half the remainder, with the children getting the rest at age 18. If you don't have children, the surviving spouse would get more, but not necessarily everything, dependant upon the size of your estate.

Don’t leave things to chance! Contact us now to discuss the best course of action in your individual circumstances.

IF YOU'RE MARRIED, DO YOUR JOINT ASSETS EXCEED £312,000?

The foundation stone is a comprehensive Will, and it’s vital to seek specialist advice in order to properly protect your position and take full advantage of all available allowances. Where appropriate, professionally drafted Wills containing Nil Rate Band Trusts can greatly reduce your exposure to Inheritance Tax.

THE NIL RATE BAND TRUST

When you die, everything over £312,000 (in the current tax year 2008/09) is taxed at 40%. Most married couples have traditionally avoided paying Inheritance Tax at first death because there is no tax on assets passing between husband and wife - a concession now also available to registered Civil Partners since 5th December 2005. However, this only postpones the eventual tax bill.

You may instead have considered leaving your Nil Rate Band allowance (or part of it) directly to your children, or other beneficiaries, in order not to waste the exemption on your death, but been reluctant to risk your surviving partner's financial position and so ended up doing nothing.

The answer is to take specialist advice on how to set up new Wills that incorporate Nil Rate Band trusts and an IOU facility, so that the surviving partner can still access funds as required whilst preserving the original tax concession. This ensures that there are TWO allowances to be set against the eventual tax bill which, at today’s values, can save your estate up to £124,800.

Whilst, in principle, the recently introduced 'Combined Married Persons' Allowance' - if still available by then - would achieve much the same result, and even, in some circumstances, an even greater tax saving, assuming the tax exempt rate is raised again as promised, its terms are far less flexible and discourage, for example, prior lifetime gifts. An additional advantage of the Nil Rate Band Discretionary Trust strategy is that it provides a framework to ensure that any intended beneficiaries will receive their due inheritance, irrespective of subsequent changes in circumstances and legislation. In any event, if it is clear, at second death, that the individual circumstances of the case mean that it would be more tax efficient to set aside the NRB Trust, then the Executors are empowered to do so.

ARE YOU UNMARRIED?

Perhaps you have been living for some years with your partner but have never married. You may even have children. If you die without a Will NOTHING will pass automatically to your partner. They will only be able to claim a share of your estate if you were living together throughout the two years immediately prior to your death. If they cannot fulfill this condition, they may still be able to claim support from your estate - if they can show they were partly or wholly supported by you before you died - but their claim would have to be considered by the Courts, which can be a lengthy and costly procedure.

Making a Will, and updating it as your circumstances change, is the best way to ensure that those for whom you care are well provided for in the event of your death.

DO YOU HAVE CHILDREN?

If so, it is essential to arrange a Will as this is the only way to nominate Guardians for your children if you should die before they reach the age of 18 - otherwise the Courts would have the final say!

Depending on your financial circumstances you might also wish to consider – with the help of a qualified Financial Adviser - creating an insurance fund so that, if called upon to act, your Guardians could access the funds to properly provide for your children, and such an arrangement could also create a nest egg for your children once they were old enough to manage money for themselves.

ARE YOU AN UNMARRIED FATHER?

If so, you may not automatically have any legal link with your natural children on the death of their mother, so you may need to be either named as their Guardian in the mother's Will, or apply for Parental Responsibility at a local County Court (both the mother and the father have to appear together).

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