The financial benefits of getting hitched by Zoe Bailey

The financial benefits of getting hitched by Zoe Bailey: Image 1 There are lots of positives that come with getting married, sharing a special day and experience with your family and friends, building a life with your loved one and there are also a few financial benefits it can offer compared to singletons, and in some cases, those living together outside of wedlock.

Here Zoe Bailey, director of Financial Planning at Tilney shares a few of the financial advantages to tying the knot:

1. Tax Benefits Launched five years ago, a perk for newlyweds is the tax marriage allowance. If one of you earns below the basic 20% rate income tax band and the other doesn't pay tax, the non-taxpayer can transfer (£1,250) or 10% of their personal tax-free allowance to their tax-paying spouse. This can save just over £230 each year by altering your tax code in a tax year, this can build up to a sizeable amount over time that can be saved towards your bigger financial goals in the future.

2. Think about your Pensions Again, if one of you is a higher-rate taxpayer and the other a basic-rate taxpayer, then the basic-rate taxpayer spouse can pay into

The financial benefits of getting hitched by Zoe Bailey: Image 2 a pension in their spouse's name with the reward of double the tax relief. In time, this could lead to a much larger pension pot for you both to access later in life. Just remember, should a divorce become necessary, it's vital a solicitor is contacted to ensure both parties have equal pension rights and then split the Pensions appropriately. It's also worth noting that should your spouse pass away, most workplace, personal and private pension schemes will pass on benefits to the widowed partner and any other beneficiaries chosen. However, there are also some Pension schemes that can only be passed on to a surviving spouse, and would otherwise be lost.

3. Property or Market Investments No longer do you have to worry about using up your personal ISA allowance each year. Once you're married, if you've reached your limit, you also have access to their allowance too if they have not used it already. Sometimes more importantly, as a married couple, you can now transfer/gift assets to each other without having to pay any Capital Gains Tax (CGT). Plus, you each have a Capital Gains Tax (CGT) free allowance each Tax Year, this year it is £12,300. This is the amount of profit you can make from an asset (including a second property) each tax year before any tax is payable.

The financial benefits of getting hitched by Zoe Bailey: Image 3 So, if an asset is owned by you, you can transfer half of it to your spouse without having to pay any CGT, and then you're free to use both of your allowances and double the amount of gain you can make before any CGT is due when you sell the asset, which this Tax Year would be £24,600 and potentially saving you £4,920!

4. Protect your Future Particularly in the current climate, should you or your spouse get into difficulty professionally or medically, marriage can provide some protection to ensure your family will remain financially secure if either one of you were suddenly unable to provide for a period of time. You can take out a specific policy such as Family Income Benefit protection, which will pay a tax-free monthly income should your spouse die. Other examples are Income protection cover, which pays a tax-free monthly income to you if you're unable to work due to a health condition or injury, and critical illness cover pays a lump sum or a regular tax free income to you if you are diagnosed with (and survive) a serious illness, or have to undergo certain complex surgical procedures. There are several options that can provide married couples with financial peace of mind should your spouse pass away, fall ill or need an extended period off work.

The financial benefits of getting hitched by Zoe Bailey: Image 4 5. Marriage cancels old Wills While it can be off-putting to consider will writing early on in a marriage, securing both of your futures is key. Do remember that if you have an existing Will, then this will automatically be cancelled after you have got married. Wills are there to protect any money, inheritance, property or assets left to your spouse and ensure the wishes of each are honoured after their death. While non-married couples can face an uphill battle to receive what their partner wanted them to have without a will present; when you are married this is somewhat protected by the intestacy rules. However, drawing up a will is still the best way to be absolutely certain your assets go to the right person or people.

 
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