When it comes to the benefits of being married in the UK, there are lots of things to consider. You and your partner can share assets, benefit from each other's salaries, access marriage allowances, and various other tax benefits.
Couple these things with the other myriad benefits of being married in the UK, and it's easy to see why so many people are keen to tie the knot each year.
Here, we explain in detail the different financial benefits of being married in the UK and help you and your partner plan your financial future together.
Financial Benefits for Married Couples
It's important to say that you shouldn't get married solely for financial reasons! But if you're sure that you want to spend the rest of your life with your partner, then getting married can have several long-term financial benefits.
Unfortunately, you need first to navigate the cost of the wedding itself – research shows that the average UK wedding costs £17,300, which is a significant amount of money.
Of course, you can get married for next to nothing if you wish, with many people opting for a registry office ceremony followed by a meal at home with close friends and family to save money. After all, not everyone needs or wants a fairytale white wedding!
So, in this section, we look at some of the tax benefits of being married and answer the question – what are the benefits of being married in the UK? – as you look to the future.
One of the most significant financial benefits of being married is that married couples are permitted to pass money between one another, which can positively impact the tax that you're both required to pay.
You can split your investments and savings between you, ensuring that the person with the lowest salary holds most of your assets. As Sarah at Hargreaves Lansdown explains: "Any extra can be held by the lowest taxpayer, so you pay the absolute minimum in tax."
It's a good idea to hire an accountant to help you understand how to share assets effectively, but it can be a great way to offset some of the tax you and your partner are liable to pay.
Another tax benefit of getting married in the UK is that you can transfer up to £1,260 of your personal allowance to your husband, wife, or civil partner when it's time to submit your annual tax return.
As a result, this reduces your bill by up to £252 in the tax year, running from 6 April to 5 April. Again, it's worth hiring a family accountant to help you and your partner understand the various benefits of the government's marriage allowances, but knowing that such a program exists is a good starting point.
Find out more about how marriage allowances for couples work here.
Capital gains tax liability
There are specific rules for capital gains tax on gifts or assets you give to your husband, wife, or civil partner. In most cases, you don't pay any capital gains tax on assets you give or sell to your partner, which can offer significant savings.
You are exempt if you sell to your partner and do not live together in the tax year or if you provided them with goods they then sold via a business. You can read up on married couples' capital gains tax liability here.
Many people regard inheritance tax as particularly unfair, and for a good reason. After all, you've worked your entire life to provide a financial legacy for your family, only for HMRC to take a significant chunk of it away from you.
But getting married and managing your inheritance correctly can be a highly effective way of reducing the amount you pay in tax.
Married couples and people in civil partnerships can leave unlimited wealth to their spouse or civil partner without triggering an inheritance tax bill. Moreover, your spouse can inherit your unused £325,000 tax-free allowance and £175,000 residence nil rate band that they can pass on when they die.
Jason Hollands, managing director at investment group Tilney Bestinvest: “When an individual makes a gift of capital/assets to another individual during their lifetime – perhaps a car or a high-value piece of jewellery – it may be classed as a potentially exempt transfer and, should death occur within seven years from the date of the gift, the beneficiary may be liable to inheritance tax.
“However, gifts between spouses or civil partners are not potentially exempt transfers – they're ignored for inheritance tax purposes altogether."
The last thing you want is to be liable for a significant tax bill on any inheritance you plan to leave to your loved ones when you're gone, and getting married is an effective way of ensuring that you can leave money with your spouse that HMRC cannot touch.
Nobody likes to think about death as it's a complicated topic to bridge, particularly if you're still young. In the UK, if you die without a will, your spouse or civil partner will receive your entire estate. If you have children, your spouse gets the first £270,000, while any children receive the rest.
Crucially, however, if you are not married to your spouse and die without a will, the surviving partner has no automatic right to any inheritance from your estate. This can cause stress and anxiety for your partner after your death, and there are no financial assurances that they will be able to access any of your wealth.
Another thing about being married is that your spouse can receive a bereavement support payment of up to £3,500 following your death, as well as £350 per month for 18 months after that if you are a parent of a child under the age of 18.
Presently, the government does not award this to unmarried cohabiting couples, which is another reason it's financially beneficial to tie the knot.
Financial Benefits for Married Parents
In the UK, a mother has parental responsibility for her child from birth, a key legal distinction. A father is legally responsible for his child if he is married to the mother and listed on the birth certificate.
However, for unmarried couples, things are slightly different. An unmarried father can get parental responsibility for his child by jointly registering the birth, getting parental responsibility from an agreement with the mother, or through a court order.
This is important to think about. If you are not married, only the mother is legally financially responsible for the child, which can cause significant issues for you and your child’s future health. Married parents share the responsibility of raising children, both financially and emotionally.
So, if you and your partner are planning to bring a child into the world, it makes sense to get married beforehand to ensure that you are both legally and financially responsible for your baby.
The bottom line is that you should never get married solely for financial reasons. That being said, there are several economic benefits of being married, which is hard to ignore.
You and your partner can share assets and access a range of tax benefits that aren't available to unmarried couples. Getting married also has financial benefits for your children, as it offers them additional protection and support. All of these financial benefits should help you decide whether or not to get married to your spouse.
If you're having conversations with your partner about getting married, HyperJar is here to help you. Check out our Household Finance and Budgeting Templates blog to get your finances in order ahead of your big day and start planning your financial future together for added security.