Romance and commitment are all well and good when deciding to tie the knot with your partner, but what are the financial advantages of getting married?
Besides the obvious desire to spend your life with someone else, getting married has huge financial implications for everyone involved, and a great many benefits.
I tend to congratulate the happy couple at any weddings I attend with the usual “it’s such a special day” and “take some time to yourselves to take it all in”.
But in the back of my mind I’m thinking “wonder do they realise that they can now avail of the generous tax benefits that are only open to married couples?”
It’s an important thing to have in mind planning a life together, so let’s take a look at these less romantic, but nonetheless equally important, aspects of marriage.
The Revenue treats married couples much more favorably if there is a gap between the couple’s respective incomes.
If a married couple has only one income or one spouse earns less than €34,550 and the other more, the tax saving is up to €3,450 a year compared to a single person!
The Home Carer tax credit
This credit is given only to jointly assessed married couples, where one spouse works in the home caring for a dependent person (older relative or child).
It is worth €1,200 per year if the stay-at-home spouse earns less than €7,200 per annum.
Succession rights on death
The Succession Act 1965 automatically kicks-in on the death of a married person, irrespective of a will or the deceased person’s wishes, and gives their spouse a ‘legal right share’ to one third of their estate.
Again, with co-habiting couples there is no automatic entitlement to a share of their partners estate. And even if they’re named in a will there could be a tax on their bequest.
Capital acquisitions tax/ Capital gains tax advantages
It is essential to remember that cohabiting couples are treated as “strangers” from a revenue point of view.
When it comes to inheritances, they are only allowed a tax free threshold of €16,250 with anything in excess of this being charged at a staggering 33%!
There is no such limit between married spouses and all of their assets (including their home) and money can be left to their husband or wife without Revenue getting involved.
There are also capital gains tax advantages unique to married couples where profits or losses can be swapped indefinitely between spouses.
We see this regularly in our business. Couples who aren’t married can take out life insurance on each other.
Most commonly this would be a requirement from a lender in order to pay off a mortgage.
Unmarried couples are unaware that it can still leave the remaining partner with a huge tax bill on pay-out.
We’ve said it before, but once you’re married there is no tax paid if your spouse leaves you anything.
Beyoncé said it best “If you like it then you should’ve put a ring on it!!”