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As if there wasn’t already enough pressure for singles to find that special someone to settle down with asap, there is considerable evidence that being married is more economically beneficial, as well as being a good solution to many of the problems that our society faces as we get older, such as loneliness and the need for home care. Even if you’re planning on marrying for love, it’s worth knowing what kind of economic advantages you’re going to experience by tying that knot.
You can pay less income tax. A new tax break being introduced in April 2015 will be available where both people in a couple have income that falls below the higher rate tax bracket. It allows married people and civil partners to transfer up to £1,000 of their personal income tax allowance to their partner. This could save up to £200 in tax each year – every little helps.
You pay less capital gains tax. Married people and civil partners can transfer assets to each other without paying capital gains tax and this can be used to reduce one partner’s capital gains liability – for example, where a profit on shares has been made, if a proportion of the profit is transferred to an other half the tax on the profit can be reduced or wiped out. Sharing the gain in this way can significantly reduce tax liability for one person and benefit your joint finances.
You can share basic costs. This is a fairly obvious one but can make a huge difference to monthly budgets. It may be something as basic as sharing a one bedroom flat with a partner, splitting the rent in half rather than paying it all yourself, or keeping your food costs low by cooking and eating together. Plus, those people who have tied the knot tend to be less inclined to go out as frequently as singletons which makes for considerably less expense on bar and restaurant bills.
There are inheritance tax benefits. It’s ironic that one of the biggest economic benefits of being married is accessible when one partner dies. Essentially, when a husband or wife dies any assets can be passed from one to the other without there being an inheritance tax to pay, even if the assets go over the personal inheritance tax threshold. This is a huge advantage as inheritance tax is currently at 40% for any assets worth over £325,000 (including your home if you own it).
You’re more likely to get a mortgage. It’s a simple fact that two incomes are better than one so if you’re looking to buy a property then you’re going to benefit from doing it with someone else. Not only will you most likely be able to buy a better property but you may well get a better mortgage rate if you’ve got a bigger deposit between you and larger incomes, as together you’re much less of a security risk for the lender than on your own.