Extending civil partnerships to different-sex couples

Alison Green, partner at Mackrell Turner Garrett, looks at the issues underlying the campaign for the extension of civil partnerships.

On Wednesday 13 January 2016, a panel discussion took place at the House of Commons exploring the opening up of civil partnerships to different-sex couples.  I was a panel member together with former Children’s Minister Tim Loughton MP, Shadow Human Rights Minister Andy Slaughter MP, and Professor Robert Wintermute of Kings College London. Also in attendance were couples who have been affected by the current legislation.

The panel discussion was organised by a campaign calling for equal civil partnerships.  Tim Loughton MP’s Ten Minute Rule Bill seeks an amendment to the Civil Partnership Act 2004 (CPA 2004) and will have its second reading on the 29 January 2016. There is also a legal challenge by way of judicial review of the CPA 2004 due to be heard on 18 and 19 January 2016 in the High Court.

CPA 2004 currently only allows same-sex couples to form a civil partnership and Charles Keidan and Rebecca Steinfeld have commenced the judicial review process because the current legislation prevents them, and many thousands of different-sex couples, from having the choice of forming a civil partnership rather than marrying. For the history and progress of the judicial review proceedings see here.

Background

Despite the myth of common law marriage, there are no automatic statutory rights for different-sex couples who live together, or indeed same-sex couples who cohabit and do not marry or enter into a civil partnership.  Unmarried different-sex couples are the fastest growing family type, increasing by 29.7% between 2004 and 2014.  While there are many reasons as to why it would be appropriate to extend the CPA 2004 to unmarried different-sex couples, three in particular are of significant importance:

The impact of relationship breakdown

An example would be a lady in her 50s who has been with her partner for about 30 years.  They lived in a property owned by him and they have a 19 year old daughter living at home and in employment.  She works part-time.  The relationship has broken down and she has been asked to leave what was the family home by her partner.  Given that the property is not in joint names, she has never contributed financially to it, and her partner has never made any promises to her that she can stay there for the rest of her life, or that it is her home forever, it is almost impossible for her to make any claim for a share in that property without being able to show one of the above.  She has therefore lost her home and although she has a part-time income it is insufficient for her to secure a mortgage, and over the years has not been enough for her to build up any savings.  As an unmarried partner, she is unable to make a maintenance claim against her former partner.  She is also unable to claim a share of his personal pension that he has contributed to and built up over the last 30 years.  Turning to the parties’ daughter, because she is over 18 and in work the mother cannot make a child maintenance claim against the father.  If the daughter had been under 18 and in full time education, then a child maintenance claim could have been made.  Likewise, if the father had the financial resources, the mother might also have been able to make a claim under Schedule 1 to the Children Act 1989 for capital provision for housing, furniture, a car and such like.  However, the wrinkle in that legislation is that when the child finishes education, everything that has been provided by normally the father, reverts to him and the mother is left with nothing.  There is also no automatic right to this provision even if the daughter were still in education and therefore the mother would need to make a claim against the father, and if he failed voluntarily to agree to that claim, then she would need to make an application through the courts.  The lady is left with very little compared to what a wife or a civil partner would be left with in similar circumstances.

Inheritance

If the parties are married, or in a civil partnership, and one party dies without a Will, the survivor under the intestacy rules receives the first £250,000 of the estate absolutely and then, depending on the value of the estate and whether there are children, further intestacy rules apply as to how the balance of the estate is distributed.  However, in an unmarried different-sex couple scenario, the survivor has no automatic right to anything from the deceased’s estate.  Therefore, a surviving partner would have to approach the administrators of an estate and make a claim of dependency.  If the administrators refuse to meet that claim voluntarily, then the surviving partner would need to make an application under the Inheritance (Provision for Family and Dependants) Act 1975.  Even with a Will, the same issue may arise if the deceased has not provided for the surviving partner.  As with any court application, a cost is involved to commence proceedings and the surviving partner may not be in a financial position to afford to do that.

Tax

Civil partners and married couples benefit from Inheritance Tax (IHT) and Capital Gains Tax (CGT) allowances in relation to the transfer of assets between them in life or on death.  However, unmarried different-sex couples living together are classified as unrelated for tax purposes. CGT therefore will arise on the transfers of assets during life, subject to personal allowances.  Likewise, IHT will arise on an asset transfer on death between parties subject to the current £325,000 exemption. A simple example is where a woman owns a property worth £500,000.  She leaves it in her Will to her male partner to whom she was not married.  In order to keep that property, he would need to pay IHT on £175,000 worth of value in that property at the rate of 40%, or it would have to be sold to meet the tax liability.  This would not be the case if the parties were married or civil partners.

Conclusion

The current lack of applicable law for unmarried different-sex couples affects them on relationship breakdown, death and in relation to tax issues.  All of these would be very readily resolved if the current civil partnership legislation was extended to unmarried different-sex couples.

The ongoing debate and the outcome of the judicial review case is one which will be closely followed by thousands of couples to whom the change in the law would make a massive difference.

Alison Green is a partner and head of the divorce and family group at Mackrell Turner Garrett

The campaign website may be accessed here.

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