Getting married could save you up to £250,000 in taxes – here’s how couples are missing out on huge financial benefits
As Valentine’s Day approaches, many UK couples might be pondering more than just romance: tying the knot could unlock substantial tax savings worth tens or even hundreds of thousands of pounds over a lifetime.
New analysis by financial experts at Quilter shows that marriage or entering a civil partnership remains one of the most overlooked ways for couples to strengthen their finances, particularly through targeted tax reliefs and exemptions that cohabiting partners simply don’t receive.
Inheritance tax protections
One of the biggest advantages comes from inheritance tax (IHT) protections. Married couples and civil partners can transfer assets to each other completely free of IHT and capital gains tax (CGT).
More crucially, they can combine their individual allowances: each person has a £325,000 nil-rate band plus a £175,000 residence nil-rate band (for passing on a family home to direct descendants), allowing a couple to potentially shield up to £1 million from IHT entirely tax-free.
Without marriage, cohabiting couples face the full 40% IHT rate on estates above £325,000, with no automatic transfer of allowances.
Financial commentators, including consumer champion Martin Lewis, have previously pointed out that this disparity can result in six-figure tax bills, sometimes estimated at around £240,000 or more, which could be avoided entirely through marriage and proper planning.
“This Valentine’s Day, popping the question could be one of the most financially savvy choices you make. While marriage isn’t for everyone, there is no denying that much of the current policy around tax benefits and allowances still favour those who are married or in a civil partnership. It might not be the most romantic way to think about it, but tying the knot does unlock certain tax advantages,” said Holly Tomlinson, a financial planner at Quilter.
Marriage allowance
Another key perk is the Marriage Allowance, which lets a lower-earning partner (typically earning under the personal allowance threshold) transfer £1,260 of their tax-free allowance to a higher-earning spouse or civil partner who pays basic-rate tax.
This can deliver annual savings of up to around £250-£252, depending on exact tax rates – a modest but compounding benefit over decades.
Spousal exemptions also allow couples to shift assets between them without triggering CGT, helping optimise investments and reduce overall tax exposure on gains.Quilter stresses that these rules apply only to married couples and civil partners – cohabitees get none of these automatic protections. For unmarried partners, the firm advises having up-to-date wills in place, as there’s no automatic inheritance without one (unlike for spouses).
For personalised advice, couples should consult a qualified financial planner, as individual circumstances vary and rules can depend on factors like estate size and eligibility.
