Gifting to girlfriend for ISA: confirmation requested

ozzage

Yes atush that's my whole point... currently people are discriminated against for being unmarried, and in my view that's wrong. Your statement is a little contradictory, in that you use the current state of the law as an argument against changing it

The fact that the law is old is hardly evidence that it's good. That would be a dangerous tack!

In my view, marriage is a private thing between two people. It should be nothing to do with the state, in the same way that religion should be nothing to do with the state.

Anyway, to put all your minds at ease we are actually engaged, but won't be married until next year. That's irrelevant to my point though: the state should not discriminate against couples who choose not to marry.

bowlhead99

ozzage wrote: »

Anyway, to put all your minds at ease we are actually engaged, but won't be married until next year. That's irrelevant to my point though: the state should not discriminate against couples who choose not to marry.

Sure, but they've decided that tax-wise they will only give you the right to share certain tax-related or other advantages with another individual if you sign a particular piece of documentation that says your affairs are inextricably linked, you intend you only have one of these other persons that you're sharing with at any one time, the declaration is for the long term and not easily revoked, and you've had that documentation witnessed by a couple of people and an approved reputable public official.

The document is called a marriage register, and is internationally recognised.

Disregarding the historic reasons for marriage and whatever positive or negative social stigma goes with it, I don't think the fundamental concept is a bad one and the 'discrimination' to only confer advantages (in terms of tax planning, intestacy laws etc) to people who sign up to the scheme and make the declaration, is fine with me. You don't have to choose to wear a ring every day or change a surname upon signing just because your anscestors did.

But there is some sensible reasoning behind driving these administrative / tax advantages from a public register (which helps to ensure you only have one spouse taking the advantages at once), rather than have every couple sign a personally customised contract with each other and then put in a claim to HMRC supported by the contract paperwork, or perhaps the anecdotal "well we haven't documented it but we've shared a bed for 10 years and would probably have done so next year if she hadn't died, feel free to ask our mates if you don't believe we were committed."

I presume you feel that tax breaks for 'proper couples' should exist, but just don't want to jump through hoops to get them. You have the choice of not taking the breaks or not completing the paperwork. If you don't want to do the paperwork because of your philosophical viewpoint about the government meddling in your affairs or how society would view you, feel free not to do it, but you're shooting yourself in the foot. If you don't declare you're a couple "because it's none of your goddam business", you are not going to get any couple-based advantages.

Or do you simply think there should be no such thing as couple-based advantages? As a single, I recognise that a person and their life-partner sharing a lifestyle and using combined finances would be disadvantaged by tax rules which charge CGT on transferring assets between themselves, or IHT on death, or indeed one person's assets going to their parent when they die without a will. The government have a system that recognises and addresses that, you can sign up for the recognition at a registry office near you for a nominal fee.

Sorry I know this is off topic from your original post

pyueck

First thing I was told when I learnt tax as a CA, was stop trying to analyse if a rule is fair/not how you would design it. As taxpayers we live in the system that we do, and unless your going to get into politics no amount of complaining at the system will change it. Work with the rules.

Yes your tax treatment as above is correct. If you are marrying your fiance next year, and am leaving everything to her in a will, I wouldn't worry too much about the IHT gift limits. If you die before 7 years your estate to you fiance would be liable to IHT (assuming you die before you marry) and the gift over £3000 would form part of your estate, so the IHT tax effect of making or not making a gift over £3000 would be none. If you died once married anything gifted or left to your wife would be IHT free irrespective if you made the gift before or after you marry.

If you are worried about your estate being liable to IHT should you die with an unmarried partner, then unfortunately the only real solution is to marry. There are some steps you can take though to try and equalise your estates, such as the richer one paying bills, paying for holidays etc, plus as you say there is nothing stopping you making cash gifts to the other. I would always say if you are thinking of making cash gifts usually do it asap with the full amount rather than drip feeding it in, as it gets the 7 year clock ticking. I kind of think the £3000 IHT exempt annual gift limit is a trick by HMRC to encourage people to drip feed gifts. The reality is that a lot of people say, oh I will give you £3000 a year, all tax free, and keep £500,000 which I will drip feed at £3000 a year. The reality is that if the person was to die after a few years most of that £500,000 above IHT limits would fall liable to capital gains tax, irrespective of whether the gift was made in all in one go or in drips of £3000 a year. However if the person survives say 10 years, then drip feeding at £3000 a year will still leave huge amounts liable to IHT, where as if a large gift was made upfront, then all that gift would be IHT free. As people needing to gift money to avoid IHT are by definition over the IHT limit, it is almost always better to get your estate under the limit asap, and then try and survive 7 years. Do not leave these things until your 70's or 80's, despite what you read in the papers, there is a fair chance in 7 years time you will be dead.

atush

ozzage wrote: »

Yes atush that's my whole point... currently people are discriminated against for being unmarried, and in my view that's wrong. Your statement is a little contradictory, in that you use the current state of the law as an argument against changing it

The fact that the law is old is hardly evidence that it's good. That would be a dangerous tack!

In my view, marriage is a private thing between two people. It should be nothing to do with the state, in the same way that religion should be nothing to do with the state.

Anyway, to put all your minds at ease we are actually engaged, but won't be married until next year. That's irrelevant to my point though: the state should not discriminate against couples who choose not to marry.

The law is as it is. I wish women and children had more protection, and some sort of legal papers could be signed to effect this w/o marriage. But there is no option for this currently, and railing about it won't help you. We seem to be fighting hard enough for legal same sex partnerships/marriage but this one has been on the back burner for a while.

The fact that you are engaged, means that at some point in the future, the fiscal advantages of marriage will apply to you both- good for you both and will hopefully save you time/money and bother in future. I suggest elopment as being a cheaper option than all the palaver of a ceremony/reception. Combine it with a holiday/honeymoon. but you may then have to forgo the gifts

And I am glad things are all hunky dory for you, and hope they stay that way. But we had a guy here just weeks ago trying to figure out how to hide/give away a 20K inheritance just in case he divorced his current wife. So that might have something to do with our caution on this issue lol.

p00hsticks

ozzage wrote: »

That's irrelevant to my point though: the state should not discriminate against couples who choose not to marry.

Yes, the the state treats couples who marry differently to those who don't - but in my view, that's not 'discrimination', it's a good thing, because it gives couples a choice as to how they wish to present themselves.

I deliberately choose not to marry my partner, I prefer the financial independence and do NOT wish to be treated as one half of a married couple by the state.

I hate the idea - which appears to have been mooted by some people recently - of the government somehow automatically considering me as 'married' just because I've been living with my partner for over twenty years. If the OP wants what they see as those benefits, then there's an easy way for them to get them - a quick trip to registrars office. But don't take the choice away from me.

ozzage

This is all off-topic, but it doesn't matter

I don't agree with that, because if somebody has been sharing your life for ten years then they also deserve the same protection as in a marriage. What if you refuse because you think it's a religious thing and don't believe in it? Then should she leave you, to avoid financial risk? Not right in my eyes.

In Australia you would be deemed to be in a "de-facto" relationship and your partner and any children would have the same rights as if you were married. This is much fairer on the "dependent" half of the couple, if there is one.

To be honest though, I see protection of an dependent partner as a different subject than that of tax advantages. They are not the same thing.

I guess it comes down to see how you see marriage. For me it's something like signing up to a religion, and should be optional. Now it's "theoretically" optional, but you'll be punished by the state for not participating, which also further promotes the view that "marriage = normal people" and "unmarried = not a real family", which I object to.

Whether couples should get advantaged at all is another topic. I do feel sometimes that single people get treated badly. It's often not their own choice to be single and they may well prefer to be part of a couple. Then on top of that they get disadvantaged financially!

jamesd

ozzage wrote: »

Yes atush that's my whole point... currently people are discriminated against for being unmarried, and in my view that's wrong.

There are people in relationships, even long term relationships with children, who do not want the changes that come with marriage and choose not to marry. Things like the presumption of an even split between spouses of financial gains within a marriage, say. Forcing them to be treated as married anyway wouldn't be fair to those who choose not to be.

p00hsticks

ozzage wrote: »

This is all off-topic, but it doesn't matter

I don't agree with that, because if somebody has been sharing your life for ten years then they also deserve the same protection as in a marriage.

And they can get precisely that protection - simply by getting married !

I said I'd been living with my partner for over twenty years - you used a reference of ten above.

What would the cut-off point be - twenty ? ten ? five ? From what point - from when you started co-habiting ? how would you define that ? How would the government know ? I know - you could go along to a government office (let's call it a "registrars") and fill in a piece of paper to tell them (let's call it a "marriage license"). How about that ?

ozzage

Those questions have already been successfully addressed in other countries so they are hardly insurmountable

StuC75

Not knowing how your household finances are set up why not have it that the Girlfriend pays the money in from her own earnings, and then you offset that to what may be paying into bills, with you then making up that shortfall with what you pay into the bills.. that way no such confirmation is needed to cover your work round on what is an individuals savings product..