What are the benefits of getting married?

Jaguar_Skills

My girlfriend and I have always said we would get married later in life, after children (our first is due in June).

However, are there any major obvious tax breaks that we are missing by not doing it sooner?

We are both HRT payers (currently) and we also have a flat that we own 50% each of. Regardless of whether we marry or not, would it make sense to transfer the flat back to her name solely and if when she goes back to work after we have had our children (likely two) would it then cost us again to transfer it back to my name also?

I am conscious that when I am the sole earner I will be getting PAYE tax through work and also some tax through profit on the flat.

Darksparkle

So is she not planning on returning back to work after her maternity leave?

Jaguar_Skills

Likelihood is she will probably take at least a year off. We are then deliberating whether she goes back to work in which case our baby would go to the nursery just round the corner from us.

Pennywise

Gifts of property are taxed as if they were sold at open market value normally. The exception if for married couples where they can be gifted at purchase price instead. So if you gave her your share of the property before you were married, you'd be subject to capital gains tax as if you sold it at market price. If you gave it her after marriage, there's no capital gains tax.

Jaguar_Skills

Pennywise wrote: »

Gifts of property are taxed as if they were sold at open market value normally. The exception if for married couples where they can be gifted at purchase price instead. So if you gave her your share of the property before you were married, you'd be subject to capital gains tax as if you sold it at market price. If you gave it her after marriage, there's no capital gains tax.

Thanks Pennywise, is the CGT regardless of value as the flat is only worth £235k.

I assume then that there is nothing that I can do to avoid the tax implications since we are not married?

Mojisola

Jaguar_Skills wrote: »

My girlfriend and I have always said we would get married later in life, after children (our first is due in June).

Not relevant to the money side of things but, as you are holding off marriage until after you've had children, you won't automatically have parental responsibility for your children.

You will have to go with your GF to register the births in order to get your name on the certificates.

agrinnall

The obvious benefit if she does not work is the transfer of personal allowance, which is only available to husband/wife or civil partners.

https://www.gov.uk/marriage-allowance/how-it-works

booksurr

agrinnall wrote: »

The obvious benefit if she does not work is the transfer of personal allowance, which is only available to husband/wife or civil partners.

https://www.gov.uk/marriage-allowance/how-it-works

yes, but OP states he is HR taxpayer (and we shall assume will remain so) therefore he cannot benefit from the transfer unless he wishes to do the normal things to bring himself back down to basic rate - and with a new kid in tow I doubt that makes sense since 60% of something now is better than 100% of a pension in 30 years time ?

As a HR taxpayer OP will lose the ability to claim child benefit if his income is above 50K whether he is married or not.

OP - yes the CGT calculation has no minimum limit since it is a tax on a gain. You have to have made a gain in order to be taxed. The gain being the difference between original purchase price and what you finally sell it for. Where there is a transfer between unmarried people without a "sale", then market value must be used as though it had been sold at that price and the gain is therefore "crystallised". If married, any number of transfers you do are at a no gain, no loss basis, ie free.

As regards the flat the default position for married owners is 50/50 share. That can only be altered if a) the flat is owned as tenants in common and b) there is a declaration of trust registering the actual owner shares (%) and c) a Form 17 has been submitted to HMRC. then a married couple could take real advantage of a basic/non taxpayer status v a HR payer and pump the profit thought the lower rate taxpayer whilst still having co-ownership for CGT purposes.

TheCyclingProgrammer

Do you currently have a will? If you don't, have you considered what will happen to your assets if something happened to you? I'd highly recommend getting a will drawn up if you're not married; it might be advisable having one anyway (note that by default a will normally becomes invalid when you marry unless its drawn up in contemplation of your marriage).

getmore4less

One of the most significant benefits of marriage is the transferable nil rate band.

it may not look like much today with kids on the way and a mortgage but the transition from not much asset to over £325k can happen quite quickly.

Should one of you die leaving the other with a £650k-£1m nil rate band could be very beneficial to your child.

Mojisola

Jaguar_Skills wrote: »

My girlfriend and I have always said we would get married later in life, after children (our first is due in June).

We are both HRT payers

As you are both earning well now, this may seem a world away (but life can change) - if one you died young, there are benefits available to the widow/widower than unmarried couples can't claim.

https://www.gov.uk/widowed-parents-allowance
https://www.gov.uk/bereavement-allowance/eligibility