Spouses, Registered Civil Partners and Paramours
Nick Evans | 03/02/2005
The Civil Partnership Bill received Royal Assent on 18 November 2004. The Bill requires further drafting before it finally becomes law probably in late 2005 or may be even early 2006. The Civil Partnership Bill is a landmark piece of social policy legislation and for the first time will give legal recognition to same sex relationships. It will also give many of the same rights currently enjoyed by married couples including pension entitlement, tenancy rights and parental responsibility. The act will also aim to treat same sex partners the same way as married couples for tax purposes (although details of the tax treatment are not yet published by the Government). Importantly, the Act does not bestow these legal rights on opposite sex co-habiting couples.
Under the Act, Civil Partnership Agreements replace engagements, a Registered Civil Partnership replaces marriage (the registration procedure would be the wedding) and civil partners replace spouses. The Government has sought to ensure that rights are balanced by responsibilities and therefore is introducing procedures for dissolving the Civil Partnership (divorce) together with procedures for regulating the welfare of children of a relationship which has been dissolved and civil partners will for the first time come within the definition of “relative” and therefore able to obtain parental responsibility of a child of the family. There is as yet undetailed provisions which will apply to pension sharing.
An area that is going to be of keen interest is Registration of Civil Partnerships (getting married). The effect of the legislation will be that those planning a civil registration ceremony must now consider Wills and tax. The proposal is that taxation of Civil Partnerships be brought in line with the tax treatment of married couples. These changes are likely to appear in the next Finance Act. Of particular relevance is Capital Gains Tax and Inheritance Tax. Capital Gains Tax is highly relevant particularly if the couple own two properties for which they each receive an independent Capital Gains Tax principal private residence exemption. It is likely this will be brought in to line with married couples and the Inland Revenue allow only one principal private residence exemption per couple. As the law currently stands same sex couples do not have an unlimited Inheritance Tax exemption. This can have serious consequences on death as the surviving partner may face an immediate tax liability of 40% on assets transferred to them in excess of the Nil Rate Band. Under the new legislation civil partners are likely to have an equivalent unlimited Inheritance Tax exemption making tax planning during lifetime and in Wills much more important. Particular advice should therefore be taken before the Act comes into force.
In relation to Wills the same legislation which applies to married couples will apply to Civil Partnerships. A Will will be revoked by entering into a Civil Partnership. Our clients must therefore consider whether they will make new Wills before the Act comes into force (in contemplation of becoming civil partners) or wait until after the Act is in force and the Civil Partnership has been registered. There are also rules relating to civil partners not acting as witnesses to Wills.
Finally, what of the paramours and co-habitees of the world, those who do not marry or enter into a civil partnership. The law will continue to apply in the same way it does at the moment although civil partners who do not make a Will are likely to fall into the same category as a spouse under the intestacy provisions and under the Inheritance Act (Provisions for Family and Dependants).
The information and options contained in this article are only intended as a general view of the subject concerned. Specific advice concerning individual situations should always be obtained from the usual contact at Griffith Smith Farrington Webb LLP. No part of the publication may be produced without the express written permission of the individual author.
