A mum, dad and child hold hands as they walk along a beach

Love, marriage and tax

It would be difficult to ignore that it is Valentine’s Day on Saturday and no doubt restaurants are hoping for full tables given that the day falls at the weekend. Many people would view this as the most romantic time to make a marriage proposal or even as the choice of a wedding day.

So if you are lucky enough to receive a proposal this weekend, in the everyday, unromantic world what will it mean for you and your spouse-to-be as far as tax and inheritance are concerned? Long gone are the days when marriage meant an Income tax advantage and some pragmatic people timed their wedding to take advantage of this. Since the advent of independent taxation spouses are treated separately for income tax purposes but for other taxes marriage, and indeed entering into a registered civil partnership, still brings some advantages.

For example, after marriage there are no capital taxes payable on gifts between spouses so you can treat your new partner as much as you like without worrying about the tax consequences. You can, however, only claim one residence between you as being free from Capital Gains tax under the main residence exemption, so clearly the taxman expects married couples to share a home. This may be relevant if you have retained a second home as you will need to make an election within two years as to which is to be your main residence for Capital Gains tax purposes.

If anything untoward were to happen to you, then there is no Inheritance tax payable on assets left to a surviving spouse and if you do not use your Inheritance tax nil rate band (currently £325,000) then your spouse can claim your allowance as well as their own on their death, taking £650,000 out of the charge to tax. Remember too that spouses receive an entitlement under the intestacy rules, unlike at present unmarried partners.

So as you are popping open the champagne this weekend, celebrate also the tax advantages that your new status will bring you.