Love is in the air this time of year and it got me thinking about all things romantic. Maybe it’s our proximity to some of the North East’s most gorgeous places to get married in but we love a good wedding at Three Counties! Even in lockdown, one of the team happily tied the knot.
It is not a particularly popular attribute, but I do work in a Chartered Financial Planning firm and qualifying for the required Diploma involved swotting up on the tax breaks gained by marriage, so it’s only expected I also see the, less romantic, benefits of being in a relationship and perhaps ultimately walking down the aisle.
Being married appears to have a range of health advantages. Married people (especially men!) have a lower risk of disease, eat more healthily, and live longer. Married people also seem to have double the wealth of those who never marry for a variety, due to supporting each other in career growth, for example.
However, marriage rates are down over the decades, reflecting the rise in cohabiting amongst couples but there still are a few, shall we say ‘unromantic’, advantages.
Married couples may benefit from a reduced capital gains tax bill, a reduced inheritance tax bill or even pay less income tax that cohabiting partners would not. Relatives and friends can even perform some estate planning by gifting at your wedding.
As an example, the capital gains tax (CGT) aspect can be very useful.
If you held shares outside an ISA that had a significant gain and gifted them to anyone other than your spouse, even to your partner or a family member, it would be classed as a disposal and CGT may apply.
However, you would not pay CGT if you gifted or sold these to your wife, husband, or civil partner. If they then sold the shares, their gain will be ‘calculated on the difference in value between when you first owned the asset and when they disposed of it.’
The CGT is still paid but this potentially delays the tax and allows longer-term planning on any disposals.
It should be noted that if you did give away these shares, they are of course no longer yours and you have no recourse to order either their sale or retention for example. They belong to your spouse who is free to do as they wish!
As with all things on this blog, this is not personalised financial advice, but you should definitely bring it up when you meet with us and we can help you build it into your financial plan.
Some helpful links on this subject include:
- Couples are healthier, wealthier… and less trim | Marriage | The Guardian
- Capital Gains Tax: Gifts to your spouse or charity – GOV.UK (www.gov.uk)
- Why are men and women getting turned off marriage? – BBC Three
Please Note: Three Counties Ltd does not take responsibility for the content and accuracy of external links. This article should not be regarded as financial advice and is for information purposes only.
Writer Bio: Nick Cranston is a Trainee Financial Adviser at Three Counties Ltd joining the team in December 2021. He passed the necessary industry diploma in August 2021.