The costly myth of ‘Common Law Marriage’

Every 6 months or so we like to remind you of this common myth because as much as we bang on about it, people still seem to think the same.

Many couples believe that living together as ‘common law’ partners gives them the same legal and Financial rights as married couples or civil partners. Unfortunately, this is a widespread myth – and one that could leave cohabiting couples with an unexpected Inheritance Tax (IHT) bill.

Unlike legally married couples, cohabitees do not automatically inherit their partner’s assets if they pass away without a Will. Instead, their estate goes to the deceased’s next of kin. Even if assets are left to a surviving partner, they are subject to IHT at up to 40%, unlike transfers between spouses or civil partners, which are tax-free.

To avoid potential Financial hardship, it’s vital to take action. Ensure your Will is up to date and names your partner as a beneficiary. If you own property together, check whether it is held as ‘Joint Tenants’ to ensure automatic transfer of ownership. A cohabitation agreement can also clarify Financial arrangements.

While marriage or civil partnership is the only way to gain full Inheritance Tax benefits, careful Planning can prevent legal disputes and Financial difficulties. Talk to us about protecting your partner and securing your Legacy—or even marriage.

Many clients have married on our advice, with love playing a role, but Tax benefits and simplicity often sealing the deal. Maybe Penguin Wedding Planning is next…

Source: www.citizensadvice.org.uk

Pension IHT consultation closes

From April 2027, any unused Pension funds and Death Benefits will count as part of your estate for Inheritance Tax (IHT). This means your Pension could be taxed when you pass away, which might reduce what your loved ones inherit.

To handle this, the government held a 12-week consultation plan to make Pension scheme administrators (PSAs) responsible for reporting and paying any IHT owed to HMRC. A recent 12-week consultation gathered feedback on how this should work, which closed on mid-January 2025.

Under the proposed rules, when someone dies, their personal representatives (PRs) will tell the PSA if IHT applies. If it does, the PSA will work out how much tax is due, report it to HMRC, and pay it. This change is meant to make Pension taxation more consistent across different schemes.

If you have a Pension, this could affect your Estate Planning, and so we will be here to help review your arrangements now to make sure your loved ones aren’t caught out by unexpected tax bills. The government is expected to confirm the final details later in 2025, so we will keep you up to date with any important developments.

To review your position now and plan in plenty of time, join us on Tuesday, March 18^th 2025 for our online Tax Briefing, or come in for a Forward Planning meeting.

Get in touch with us on 02920 450 143 or on [email protected] to find out more.

Source: gov.uk

Why expert guidance matters

The stock market can be unpredictable, and the recent DeepSeek AI shock is a perfect example. A new Chinese AI app claimed to rival the best US models at a fraction of the cost, causing a sudden sell-off in American tech stocks. Nvidia, the biggest name in AI chips, saw its value drop by 17% in a single day before recovering slightly. Investors panicked, unsure of what this meant for the future of AI and the companies leading the charge.

This kind of volatility can be unnerving, especially when global events and political shifts add to the uncertainty. Donald Trump’s return to the White House is already impacting Financial markets, with questions over trade, regulation, and competition heating up. For UK investors, this means that navigating these fluctuations requires expertise and a steady hand.

A skilled Investment team can help keep your Investments balanced, reacting to market swings in a way that protects your long-term goals. Instead of making emotional decisions or getting caught up in the latest news cycle, they focus on the bigger picture. Now, more than ever, having a professional overseeing your Investments can make all the difference in staying on track through market turbulence.

Our team is already on it, but if you have any concerns, don’t hesitate—we’re here to help. Reach out to us on 02920 450 143 or on [email protected] to find out how we can reassure you today.