Transferring money to long-term partner

leitmotif

I'm not married to my partner. I want to transfer a six-figure sum to her. We've cohabited for 17 years. I know the government/HMRC are happy to regard you as a couple when it suits them. My question is whether transferring a sum of money to one's partner would be construed as a gift and have tax implications. Everything I find online suggests this is a grey area. Would it be enough, for instance, to open a joint account, transfer money into it, and then have her withdraw it to one of her accounts?

Comms69

You can gift ANYONE, ANY amount of money at ANY time. 

Partner or not. So no idea what you're looking at.

There are implication for inheritence tax if you die with-in 7 years. That's it. (also for benefits and care home fees potentially)

pphillips

The money will still be considered part of your estate for Inheritance Tax purposes if you die within 7 years of making the gift (some relief is available if you die between 3-7 years of the gift) .

Kynthia

There's no tax on gifts in the UK. Have you been looking at sites about other countries?

pphillips

Kynthia said:

There's no tax on gifts in the UK. Have you been looking at sites about other countries?

Some non-monetary gifts will have CGT implications.

leitmotif

I think I must have been looking at the inheritance tax rules. So no capital gains tax on any amount and no other tax implications besides it forming part of your estate if you die within seven years? Still not ideal in the sense that if I do transfer such a sum and die of covid-19 in a month, she'll end up paying a percentage of it to the taxman. I suppose marriage is the only way round that?

Comms69

leitmotif said:

I think I must have been looking at the inheritance tax rules. So no capital gains tax on any amount and no other tax implications besides it forming part of your estate if you die within seven years? Still not ideal in the sense that if I do transfer such a sum and die of covid-19 in a month, she'll end up paying a percentage of it to the taxman. I suppose marriage is the only way round that?

It’s no different to you not transferring it. 

Inheritance tax is based upon your assets. If you keep it, it’s part of your estate. If you transfer it; it’s part of your estate for 7 years ( to keep it simple )

leitmotif

Comms69 said:

leitmotif said:

I think I must have been looking at the inheritance tax rules. So no capital gains tax on any amount and no other tax implications besides it forming part of your estate if you die within seven years? Still not ideal in the sense that if I do transfer such a sum and die of covid-19 in a month, she'll end up paying a percentage of it to the taxman. I suppose marriage is the only way round that?

It’s no different to you not transferring it. 

Inheritance tax is based upon your assets. If you keep it, it’s part of your estate. If you transfer it; it’s part of your estate for 7 years ( to keep it simple )

Yes, but as my wife she'd automatically inherit my estate whereas as my common law partner she wouldn't automatically inherit it without a will stipulating otherwise, no?

pphillips

leitmotif said:

Comms69 said:

leitmotif said:

I think I must have been looking at the inheritance tax rules. So no capital gains tax on any amount and no other tax implications besides it forming part of your estate if you die within seven years? Still not ideal in the sense that if I do transfer such a sum and die of covid-19 in a month, she'll end up paying a percentage of it to the taxman. I suppose marriage is the only way round that?

It’s no different to you not transferring it. 

Inheritance tax is based upon your assets. If you keep it, it’s part of your estate. If you transfer it; it’s part of your estate for 7 years ( to keep it simple )

Yes, but as my wife she'd automatically inherit my estate whereas as my common law partner she wouldn't automatically inherit it without a will stipulating otherwise, no?

Correct, common law partners don't inherit unless they benefit under the terms of a will.
The gift takes priority for claiming the Inheritance tax nil rate band over your estate.

Keep_pedalling

This would be a sensible time to marry. If you can afford to gift 6 figures then you probable should be concerned about IHT planning, and for a couple being married (or in a civil partnership) is the simplest way and most effective way of avoiding a large tax bill on the first death.  I hope you both have will in place, if not that should be a priority.

74jax

Joint account?