The Financial Benefits of Marriage: Why It Matters for Inheritance Tax Planning

Martin Lewis’s recent programme has encouraged many couples to look beyond the emotional side of relationships and consider the financial and legal implications too. At Cartmell Shepherd Solicitors, we regularly see how marriage can significantly strengthen a couple’s financial position – particularly when it comes to inheritance tax planning.

Whether you’re engaged, living together, or thinking about your long‑term future, understanding the financial protections that marriage brings can make a meaningful difference.

Marriage: A Legal and Financial Partnership

Marriage isn’t just a celebration – it’s a legal contract that immediately changes your financial position. This affects your home, savings, pension and, crucially, how your estate is treated for tax purposes.

Key financial advantages include:

•           Automatic next‑of‑kin status

•           Inheritance rights even without a will

•           Access to tax benefits such as the Marriage Allowance

•           Greater financial claims if the relationship ends

•           Significant inheritance tax protections unavailable to unmarried couples

Understanding these rights early helps couples plan with clarity and confidence.

The Inheritance Tax Benefits of Marriage

This is where marriage offers some of the most substantial financial advantages.

1. Spouses can inherit free of inheritance tax

Anything left to a spouse or civil partner is exempt from inheritance tax, regardless of value.

Unmarried partners do not receive this exemption.

2. Transferable nil‑rate band

Every individual has a £325,000 inheritance tax allowance (the “nil‑rate band”).

Married couples can transfer any unused allowance to the surviving spouse, effectively doubling the threshold to £650,000.

3. Transferable residence nil‑rate band

Where a home is left to direct descendants, an additional allowance (up to £175,000 each) may apply.

Again, married couples can combine allowances – potentially increasing their joint tax‑free threshold to £1 million.

4. Lifetime gifts between spouses are tax‑free

Gifts between spouses are exempt from inheritance tax, even if made shortly before death.

This allows couples to reorganise assets without triggering tax charges.

These advantages simply do not apply to cohabiting couples, no matter how long they have lived together.

The Myth of “Common‑Law Marriage”

Martin Lewis highlighted a misconception we see every day: the belief that long‑term cohabitation gives you the same rights as marriage. It doesn’t.

Unmarried couples do not automatically have:

•           Rights to each other’s property

•           Claims on pensions

•           Automatic inheritance rights

•           Inheritance tax exemptions

•           Financial protection if the relationship breaks down

For cohabiting couples, a cohabitation agreement and updated wills are essential tools to protect each other.

Prenuptial Agreements: Sensible Planning, Not a Lack of Trust

Prenups are increasingly common and widely respected by the courts. They help couples set out how they want their finances to be treated if they separate – reducing uncertainty and potential conflict.

They are particularly valuable where:

•           One partner owns a business or farm

•           There are children from previous relationships

•           There is a significant difference in assets

•           Family property or inherited wealth is involved

A prenup is not unromantic – it’s responsible financial planning. Although prenuptial agreements are not automatically legally binding, when they are prepared correctly, with full disclosure and independent legal advice, they can carry significant weight in court and are often upheld.

Why You Must Update Your Will After Marriage

Many people don’t realise that marriage automatically revokes an existing will.

If you don’t make a new one, your estate may not pass to the people you intend.

This is especially important for:

•           Blended families

•           Second marriages

•           Couples with property or business assets

•           Anyone wanting to protect children from previous relationships

A simple review with a solicitor can prevent future disputes.

Talking About Money Strengthens Relationships

One of the strongest messages from Martin Lewis’s programme was the importance of open conversations about money. Discussing spending habits, savings goals, debt and property ownership helps couples build trust and avoid misunderstandings.

Shannon Woodburn, Associate Family Law Solicitor puts it clearly:

“Marriage brings with it a number of legal and financial consequences that many couples simply aren’t aware of. Taking the time to understand your rights – whether you’re getting married, living together, or planning for the future – can make a huge difference. Early advice helps couples protect themselves, their families and their assets, and ensures everyone enters the relationship with clarity and confidence.”

In our experience, informed couples make stronger decisions.

Need advice? We’re here to help

If Martin Lewis’ programme has made you reflect on your own plans – from marriage to cohabitation or future arrangements our team is here to guide you.

Our family law specialists work across seven offices in Cumbria and Northumberland, offering straightforward, supportive advice.

Taking a moment to plan now can make all the difference later.

Contact our family law team today on 01228 516666.