Heterosexual couples in England and Wales are now able to enter a civil partnership, following the introduction of new laws on 31 December 2019.
Civil partnerships were introduced in the Civil Partnerships Act 2004, and following a challenge of the law in 2014, the Supreme Court ruled that opposite-sex couples should also be allowed to enter a civil partnership.
But how will the agreement differ from marriage if one of the couple were to pass away?
The effect on Wills
After marriage, any Wills in England and Wales are automatically invalid, which is why it’s essential that individuals update their Will once they are married. If one of the couple were to pass away before updating their Will, then the estate would be passed on according to intestacy rules.
The rules for civil partnership are exactly the same, while if the deceased had a valid Will, then the surviving partner would receive any assets in accordance with the Will.
How is IHT affected by civil partnerships?
In essence, civil partnerships receive the same tax treatment as marriages. This means that inheritance tax (IHT) exemptions that are afforded to a surviving partner in marriage also apply to a surviving partner in a civil partnership.
Civil partners can transfer their unused nil rate band allowance to their partner to reduce any potential tax that would be payable once the second partner dies, with the same rules applying to married couples.
This differs to those who are cohabiting, who would not be exempt from IHT should one of them pass away, with IHT payable on any inheritance over £325,000.
For help and advice in relation to Wills and estate planning, contact our expert team today.