Archives >

Summer 2004 Newsletter

Civil Partnerships

The Civil Partnerships Bill introduces the idea of registered same-sex relationships, which will have a similar legal status to a traditional marriage. This is a controversial measure, and many people have strong views about it, but we will only consider the tax consequences here.

The Inland Revenue have issued a press release explaining that same-sex couples who register their relationship under the new rules will be treated in the same way as a married couple for tax purposes. The press release goes into some detail about the effect on tax credit claims, but does not spell out the big issues - husband and wife are exempt from capital gains tax and inheritance tax on transfers between them in most cases, and it appears that this will be extended to registered same-sex couples.

The tax effect is not automatic for a same-sex couple living together, just as the rules for husband and wife only apply after a marriage. It's not clear yet how many people will go through the registration process, but it appears that there will be a tax advantage in doing so.