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Nearly 6 million Britons now living as second class tax citizens as the cohabiting population spikes

27/07/2018

New population estimates from the ONS reveals that cohabitation continues to grow in popularity, rising to close to 6m* cohabitee couples in Britain. This increases pressure on government to consider who benefits from inheritance and tax rights, says Gordon Andrews, tax expert at Quilter:

“Today’s ONS statistics show that once again the steadily-increasing trend of people choosing to cohabit shows no signs of abating. In 2017, one in eight people aged 16 years and over in England and Wales are cohabiting, which continues a 15 year increasing trend.

“These figures serve to illustrate a divergence from behaviours of the past where people didn’t live together until they were married. Although this is no bad thing, it does mean that 4.7m people who are living as a couple but have never married or civil partnered do not enjoy the same rights as spouses on death or the same financial protections a married couple with children. They are effectively living as second class citizens when it comes to tax rights.

“However, there is some indication that historic legislation that doesn’t fit with modern behaviours is finally starting to change. Just last month, a Supreme Court’s landmark judgement opened the door to heterosexual couples being able to enter into a civil partnership, no longer making traditional marriage the only option. This opens up more avenues for those cohabiting, to access the rights associated with civil partnerships and marriages.

“Judgements like these increase the pressure on the government to carefully look at who deserves the inheritance and tax rights that marriage and partnerships involve. What needs to be considered is policy that affords rights to people who live together for an extended period of time so they too are protected even without entering into a civil partnership.”

 

5 ways your rights differ if you cohabit rather than marry:

  •  A married partner would inherit all or some of the estate when their partner dies even if no will has been left. If one cohabiting partner dies without leaving a will, the surviving partner will not automatically inherit anything - unless the couple jointly own property.
  • An unmarried partner who stays at home to care for children cannot make any claims in their own right for property, maintenance or pension-sharing.
  • Cohabiting partners have no access to a partner's bank account if they die - whereas married couples may be allowed to withdraw the balance providing the amount is small.
  • Married partners have a legal duty to support each other whereas cohabiting couples are not legally obliged to support each other financially.
  • All married partners have the right to live in the "matrimonial home. However, if you are the unmarried partner of a tenant, you have no rights to stay in the accommodation if you are asked to leave.

 Source Citizens advice

*

For more information contact

Alex Berry023 8072 626007741 151931alex.berry@quilter.com
Tim Skelton-Smith02380 916 99807824 145 076tim.skelton-smith@quilter.com

Notes to Editors:

About Quilter plc:

Quilter plc is a leading wealth management business in the UK and internationally, helping to create prosperity for the generations of today and tomorrow.

Quilter plc oversees £118.4 billion in investments (as at 30 June 2019).

It has an adviser and customer offering spanning: financial advice; investment platforms; multi-asset investment solutions; and discretionary fund management.

The business is comprised of two segments: Advice and Wealth Management and Wealth Platforms.

Advice and Wealth Management encompasses the financial advice business, Quilter Financial Planning; the discretionary fund management business, Quilter Cheviot; and Quilter Investors, the Multi-asset investment solutions business.

Wealth Platforms includes Old Mutual Wealth UK platform; Old Mutual International, including AAM Advisory in Singapore; and the Old Mutual Wealth Heritage life assurance business.

The Quilter plc businesses are being re-branded as follows: 

  • Quilter Financial Planning (previously Intrinsic)
  • Quilter Private Client Advisers (previously Old Mutual Wealth Private Client Advisers)
  • Charles Derby Group (becoming Quilter Financial Advisers)
  • Quilter Financial Adviser School
  • Quilter Cheviot
  • Quilter Investors
  • Old Mutual Wealth (becoming Quilter Wealth Solutions in 2020)
  • Old Mutual International (becoming Quilter International in 2020)

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