MG Legal Solicitors 
Longridge: 01772 783314 Garstang: 01995 602129 Lancaster: 01524 581306 Lytham: 01253 202452  
Inheritance Tax
More and more people are opting for co-habitation over co-signing a marriage certificate, with an increase in cohabitation of almost 4% in the 10 years since the 2011 census (source: Our Will drafting Solicitors in Longridge have, however, found that when our clients are told about the tax advantages of marriage and civil partnerships, to many of them, it seems like a no-brainer to tie the knot.  

Do Married Couples (and Civil Partners) pay less Inheritance Tax? 

The answer to this question is two-fold. Firstly, when assets pass between spouses or civil partners on death, they pass free of Inheritance Tax. On the death of the second spouse or civil partner, their Personal Representatives can apply to transfer any unused Nil Rate Band amounts (these being the £325,000 'Nil Rate Band' allowance that every person has on death, providing they have not made any gifts which affect this during their lifetime, plus an additional allowance of up to £175,000 Residence Nil Rate Band, if a qualifying residence is left to a person's direct descendants) to the second to die's estate.  
If spouses or civil partners have left everything to each other on the first death then to their children, they will have a combined tax-free amount of up to £1million.  
So, whilst spouses and civil partners therefore do not individually have more tax-free allowance than cohabitees on death, their allowances are transferable meaning they can leave assets to each other without using up their tax-free amounts. This can, in the case of some couples, achieve a great tax-saving. 
For example, if we take Adam and Betty.  
Adam and Betty have assets worth a combined £1million, which equates to £500,000 each. Let's consider the tax position if Adam and Betty are cohabitees compared to spouses or civil partners. 

Adam and Betty as Spouses/Civil Partners 

If Adam dies, leaving his £500,000 estate to Betty, Betty pays no inheritance tax. On Betty's death she leaves her estate to her children. Her Personal Representatives ['PRs'] would apply to transfer Adam's unused tax-free amounts totalling £500,000 to Betty's estate. Betty's PRs would also apply for Betty's Nil Rate Band and Residence Nil Rate Band of £500,000, giving Betty an estate of up to £1million before tax is payable. 

Adam and Betty as Cohabitees 

Adam dies, again leaving his £500,000 to Betty, who will have to pay inheritance tax on £175,000 (£500,000 - £325,000 = £175,000) at a rate of 40%, totalling £70,000. Betty does not qualify for the spouse/civil partner exemption. In addition, Adam's Residence Nil Rate Band cannot be applied for as Betty does not qualify as a direct descendant. This tax-free amount is therefore lost on Adam's death. 
Betty's estate increases in value to £950,000. On Betty's death, she leaves her estate to her children, and her PRs apply for her Nil Rate Band and Residence Nil Rate Band. Betty has tax-free amounts of £500,000 so her taxable estate is £450,000 (£950,000 - £500,000 = £450,000). Inheritance Tax is charged at a rate of 40% on the £450,000, meaning the total inheritance tax bill is £180,000. 
Adam and Betty's estates have paid a total of £250,000 inheritance tax on their deaths, which is £250,000 more than they would have paid, had they been married or in a civil partnership. 

Fixed-fee Wills and Probate Solicitors

MG Legal's leading Wills and Probate Solicitors in Preston offer all of our private client services on a clear, fixed-fee rate. 
Our team put your first, and work with care to ensure that your wishes are met. Call us today on a free, no-obligation basis at: 01772 783314 
Get in touch today to speak to a Wills and Probate Solicitor. 

Can Married Couples Shared Capital Gains Tax Allowances? 

When individuals sell an asset, they may become liable to pay Capital Gains Tax (CGT), if the 'profit' made exceeds their annual allowance of £6,000 (as of 2023/2024, Both spouses and civil partners can transfer assets between each other free of CGT. This could allow spouses or civil partners to make use of one of them having a lower tax rate or unused annual exemption. Cohabitees are not able to transfer their CGT allowances between each other. 

Our Wills Solicitor's Warnings: 

Tax-savings may be enough to entice you to marry or enter into a civil partnership with your cohabitee. Indeed, many of MG Legal's Will-writing clients have opted to formalise their feelings to take advantage of tax savings. However, our Wills Solicitors in Longridge do have some points for our clients to note before taking any action: 

You should take full financial advice from a qualified professional; 

You may wish to seek advice about prenuptial agreements; 

Your previous marital status, such as if one party is a widow, could impact your tax status now, so seek full advice from a professional before taking any action. 

Why choose MG Legal: 

Transparent fees. 

We are the experts. 

Multiple Office Locations. 

Give us a call at any time. 

Are MG Legal 'Will writing solicitors near me'? 

Yes- MG Legal are local Will writing solicitors who help clients in the areas locally to our offices in Longridge, Garstang and Lancaster, including acting for clients in Morecambe (LA1, LA2 and LA3), Heysham (LA3), Bare (LA4), Chorley (PR6), Leyland (PR25), Fulwood (PR2), Longton (PR4), Hutton (PR4), Penwortham (PR1), Pilling (PR3), Chipping (PR3), Bilsborrow (PR3), Grimsargh (PR2), Goosnargh (PR3), Poulton-Le-Fylde (FY2, FY3 and FY6), etc. We can even act if you live elsewhere in England or Wales. Contact us today to find out how we can help you. 

How should I choose a Solicitor to write my Will? 


At MG Legal, we are highly reviewed, and this directly reflects the high level of customer satisfaction that is provided when you chose MG Legal as your Will-writing solicitors. Our team of highly qualified and experienced Wills solicitors really do care about your Will, and this is why our clients are so satisfied, and come back to us when they need further assistance.  
Our Wills Solicitors have over 30 years' experience in Will drafting, and can assist with simple Wills, leaving everything to your children, to more complex Wills incorporating trust provisions. Whilst you may think your circumstances simply call for a bog-standard Will which you can do-it-yourself, you should seek advice from a qualified professional to ensure that you consider all the implications of your estate division. This can include inheritance tax advice, claims against an estate and trust provisions

Hidden fees 

When obtaining quotes from solicitors who draft Wills, an important thing to look out for is that there are no hidden fees. Some quotes from Will-writing solicitors will not include all the fees payable. They may seem like they are cheap, but actually when you are already half way through your transaction, you are met with unexpected fees. 
This will never happen if you use an MG Legal Will-writing solicitor as the fees you are quoted will never change unless your instructions do.  

Contact MG Legal 'Will writing solicitors near me' today 

If our MG Legal Will writing solicitors are the right solicitors for you, please contact us by emailing or by calling our solicitors in Lancaster, solicitors in Longridge or solicitors in Garstang

Contact Us Today: 

To speak to a fully-qualified Probate solicitor, contact us online here. 
Or give us a call on 01772 783 314. 

Clear, fixed-fees 

Fully-Qualified Probate Solicitors 

Tailored Service 

Multiple Office Locations 

Decades of Experience 

Home Visits 

Share this post:

Leave a comment: 


Our site uses cookies. For more information, see our cookie policy. Accept cookies and close
Reject cookies Manage settings