Marriage - tax haven or tax burden?

mikemcr_2

Having just found out a little about Capital Gains Tax, it seems that there are distinct advantages for those not married ie a married couple can only have 1 x Principal Residence where an unmarried couple can have 2 x Principle Residence's. This potentially frees up large amounts of cash in the long term.

So that got me wondering whether anyone else had noticed other tax benefits/burdens from being/not being married?

fengirl_2

But you have to live in your PPR - which doesn't make you a couple!
Never do anything just for tax reasons.

mikemcr_2

fengirl wrote: »

But you have to live in your PPR - which doesn't make you a couple!
Never do anything just for tax reasons.

You can still be a couple and have 2 Principal Residencies. I do (pun intended).

I thought it'd be fun to explore tax and marriage seeing as they go together like a horse and .......

There are plenty of things I do just for tax reasons - some more intentional than others. Having an ISA, saving receipts, filing returns, applying for a single persons rebate on council tax........

So here things get evened up a little in favour of marriage/co-habitees - COUNCIL TAX. A single persons allowance is 75% of the full amount meaning a LAT's couple (living apart together relationship) with 2 x PPR = 150% council tax whereas a co-habiting couple or family only pay 100% council tax.

Pennywise

mikemcr wrote: »

You can still be a couple and have 2 Principal Residencies. I do (pun intended).

If you are both living separately in your own houses, I don't really think that you're making a meaningful comparison. If you are living together, then one of your houses clearly isn't your residence. Probably wouldn't get picked up by the CGT tax inspector, but that doesn't make it right. And certainly, if one of you is using your house for other purposes, i.e. occupied by a relative, rented out, or being used for business, then the principal private residence relief definitely won't be available and the CGT inspector probably would pick it up. The criteria for relief is not just having your own house - you actually have to live in it aswell! The CGT tax inspector will have plenty of anecdotal evidence at his disposal to argue otherwise, such as electoral roll, the address used by banks etc. If you really are living apart, then fair enough, but I think these points need to be made to other readers who could easily get the wrong impression.

From the HMRC manual:-

Common reasons for restricting relief include....Period of non-residential use by the owner. You may have information in your file that the property has not been wholly used as the owners residence through the period of ownership, for example, it may have been let for a time or the owner may have been working overseas for a time. If so relief may be limited ......