What are the financial benefits to being married?
What changes financially after your wedding day?
Marriage is falling out of favour, but we wondered, is there any benefit to getting married? Back in 2017, the Independent claimed that the average cost of a wedding was around £27,161, just short of the average yearly wage of £28,000 [Office of National Statistics]
So what reasons are there to get married (apart from a big party)?
This is the main benefit of officially getting wed, and one people may not have thought of. If you are married or in a civil partnership, when your partner dies, all their assets move to the surviving spouse without any charges. However if you are only living together, whether it’s been 10 minutes or 10 years, the surviving spouse will face an inheritance tax. This is currently charged at 40% on estates worth more than £325,000.
This helps any children too, as married parents will be able to pass on more tax free, as they can combine both partners allowance. This means that an estate worth up £900,000 could be passed on untaxed if it includes a property (we’re getting a bit detailed, but you get the drift).
Capital gains tax
It’s another tax! Usually when assets are swapped between unmarried partners or sold on, they are liable for Capital Gains Tax, however married/civil partnership couples can switch asset ownership for free and combine their tax free amount.
Much less common now, but people who have final salary pensions can pass it on to their partner when they die if they’re married. Furthermore, if they have already started to draw it when they pass, it will be subject to a tax charge of 55% unless it passes to a surviving spouse or civil partner.
Marriage Allowance was launched in April 2015. This is really only for homes on a low income. It allows transfer of £1,060 of Personal Tax Allowance to the higher earner, which reduces their tax by up to £212 per year if they are eligible.
It seems like the real financial benefits to being married only come into play when one of you dies- not the cheeriest thought. Here are some things you would expect marriage to affect, but it doesn’t;
Your credit score
Your new husband or wife’s credit history will not be automatically added to your credit report after you are married or enter into a civil partnership. Financially you are separate entities until you take out a joint liability together, like a loan, mortgage or joint bank account. This can be a good thing if your partner doesn’t have the greatest credit history.
Getting a mortgage
Unfortunately being married doesn’t make it any more likely that you will get a mortgage than an unmarried couple, as lenders are primarily concerned about your credit history and what you can afford.
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