Tax implications of marriage/civil partnership

Tax implications of entering into a marriage or civil partnership

Spouses and civil partners are taxed independently on their own income, earned and unearned, and any gains. Exceptions to the general principles apply to couples entitled to the married couple’s tax reduction for those born before 6 April 1935, individuals in receipt of child benefit where they or their spouse or civil partner have an income above £60,000 and couples entitled to transfer 10% of unused personal allowance from the lower to the higher income spouse (provided they are not a higher rate taxpayer). Also if an individual benefits from trust assets settled themselves or by their spouse or civil partner, this may mean that the trust is classed as ‘settlor interested’. In these cases the tax charge or relief may affect the tax affairs of both spouses or civil partners.

Income from assets where the legal title is in joint names are deemed for tax purposes to belong to the parties equally (with certain exceptions) regardless of whether that is the case. Where, in reality, the asset is owned beneficially in unequal shares, spouses or

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