Unmarried couples being caught by unexpected IHT bills as over 70s cohabiting rises 288%

As 288% more over-70s choose to cohabit without getting married or entering a civil partnership, large numbers of couples risk having to pay large inheritance tax bills should one pass away, according to national IFA firm Continuum.

Marriage, which was once the bedrock of society is in decline. Marriage remains popular, but it is not the only lifestyle choice. Cohabiting with a long-term partner and deciding against marriage or civil partnership is part of modern society, but many of those who take that route could face complications when money is involved if not planned for correctly.

The number of over 70s choosing to cohabit without getting married or entering a civil partnership has increased hugely over the past two decades.

According to the latest figures from the Office for National Statistics2 in 2002 there were 45,066 over 70s in England and Wales cohabiting in this way. By 2020 this had increased 288% to 175,028.

Ben Alcock, independent financial adviser at Continuum, said: “As any lawyer will tell you, there is no such thing as a “common law partner.” Although there may be social and other obligations, without a formal contract of marriage or civil partnership, there are few automatic rights over money or even things like a shared home. If one partner owns a property in their name alone, the surviving partner has no clear right of ownership or habitation if the owner dies.

Blood relatives who have been strangers for decades, or the taxman can be the ones who benefit rather than a much loved partner. There are ways to protect a home by arranging it to be in ‘common ownership’ when the property is bought. But the problem of inheritance tax remains.

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