Inheritance tax for unmarried couples

The rules governing inheritance tax are different for married couples and those in a civil partnership than for those who live together as a couple.

Inheritance tax is a tax on the estate of someone who has died. The rules make clear that married, or civil partnered spouses, enjoy far more protection and allowance against inheritance than unmarried couples. 

Our lawyers

Planning for your family's financial future is essential. We know how complex, confusing, and emotional the issues involved can be. We will work hard to understand what is most important to you and your family, then help you make the right decisions. Succession planning involves more than making a will. We can also advise on lifetime gifts, family trusts and shared business ownership, as well as any related tax issues such as inheritance tax, capital gains tax, income tax and stamp duty land tax. 

What do you need to know

Inheritance tax is a tax on the estate of someone who has died. How much you pay depends on the value of the deceased's estate, which is worked out based on their assets (cash in the bank, investments, property or business, vehicles, pay-outs from life insurance policies) minus any debts. 

Importantly, there is normally no tax to pay if the value of your estate is below £325,000 (the inheritance tax threshold – sometimes called the “nil rate band”). 

If you give your home to your children (including adopted, foster or stepchildren), or grandchildren, your inheritance tax threshold can increase to £500,000. 


There are special rules (“exemptions”) for married couples or those in civil partnerships: 

  • When you die, assets left to your spouse or civil partner, provided they're living in the UK, are exempt from inheritance tax. 
  • On top of this, if your estate is worth less than your threshold, any unused threshold can be added to your spouse’s inheritance tax threshold and can be used to minimise the tax payable when they die. This means a married couple can currently leave assets worth up to £1 million tax-free.  

These special rules do not apply to unmarried or cohabiting couples.  

If you're not married, but own assets jointly with another person, the situation gets complicated, especially when a residential property is involved. Whether or not you have to pay inheritance tax will depend on whether you and your partner own the property as “joint tenants” or “tenants in common”, and whether there's a will.


Frequently Asked Questions

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