Marriage
What are the financial implications of getting married
Last updated
The financial pros of marriage
In life
Pros
Assets can usually be transferred between spouses without incurring Capital Gains Tax.
This means that instead of the higher earner selling the asset and being liable for a higher rate of CGT, if the lower earning spouse earns little enough in that tax year, they could qualify for the lower rate of CGT.
Similarly, for income generating assets like shares, assets can be transferred to best make use of each persons Personal Savings Allowance.
If one spouse earns less than the personal allowance and the other is a basic rate taxpayer, up to 10% of the allowance can usually be transferred to the other spouse to use. This may not cover HENRYs most of the time, but if the higher earner takes a year off of work to realise some gains without paying Capital Gains Tax, they may be able to pass some annual allowance to their spouse.
Cons
For Stamp Duty Land Tax purposes, married couples living together are generally treated as one unit. If either spouse already owns another residential property, buying a new home can trigger the higher "additional dwelling" rates unless strict replacement-of-main-home conditions are met.
This can create expensive surprises, including losing first-time buyer treatment and paying a higher upfront tax bill than expected.
In death
Pros
A spouse can inherit an unlimited amount from their deceased spouse without incurring Inheritance Tax.
For Inheritance Tax, married couples can usually transfer any unused nil-rate band and residence nil-rate band to the surviving spouse, potentially doubling the total allowances available on second death if the estate qualifies.
ISAs can also be more flexible on death between spouses because the surviving spouse can usually receive an Additional Permitted Subscription equal to the deceased spouse's ISA value, helping keep family assets within the ISA wrapper over time.