Tax and benefits for same-sex married couples and civil partners
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Tax and benefits

All couples, regardless of their sexual orientation or gender identity, are assessed in the same way for benefit entitlements and tax payments. Information here explains how the rules apply for married couples and civil partners. 

Income Tax

Where one husband/wife or civil partner was born before 6 April 1935, and the couple is living together, the spouse or civil partner with the highest income can claim.

Married Couple’s Allowance

As long as they are living together, a spouse or civil partner may transfer any unused amount of their Blind Person’s Allowance to their husband/wife or civil partner.

Inheritance Tax

Anything left by one husband/wife or civil partner to their surviving spouse or partner is not subject to Inheritance Tax. Anything left by a partner of a same-sex couple not in a marriage or civil partnership, but who live together as if in a marriage or civil partnership, is subject to Inheritance Tax if its value is more than the rate set for that year. As of May 2015, the rate is £325,000.

Capital Gains Tax

A husband/ wife or civil partner does not have to pay Capital Gains Tax on the transfer of assets to their spouse or civil partner, provided they are living together. When a married couple or civil partners sells or otherwise dispose of their only or main residence, they may be entitled to Private Residence Relief. Such relief is limited to one residence. A couple must jointly nominate which property is to be treated as their only or main residence within two years of formation of the marriage or civil partnership. Any other property may then be subject to some measure of Capital Gains Tax.

Tax Credits

Single people who claim tax credits and then form a marriage or civil partnership, or live with a same-sex partner as if in a marriage or civil partnership, must inform HMRC about the change of circumstances. You can do this by writing to HMRC Tax Credit Office or calling their free phone helpline. Husbands, wives or civil partners must make a joint claim, which will take into account both partners’ incomes. This is the same for heterosexual couples.

Council Tax

Same-sex married couples and civil partners are jointly liable to pay their council tax.

Students: the husband/wife or civil partner of a foreign student will be exempt or disregarded from council tax if he/she is not a UK citizen, and not permitted to work or claim benefit while in the UK. Unoccupied property discount of 50%: if a husband/wife or civil partner is required to live elsewhere as a condition of employment, a 50% discount may be granted.

Carer Disregards: a 25% discount may be granted if a person moves into a home to care for another. However, the carer must not be a relative. A husband/wife or civil partner is classed as a relative.

Annexes: an annexe attached to a house is exempt from council tax if a dependent relative of a husband/wife or civil partner lives in it.

Liabilities on death: council tax arrears of a husband/wife or civil partner are payable, out of the deceased estate. Annuities payable to a surviving spouse or civil partner, are excluded from an attachment of earnings order.

Income-based Jobseeker’s Allowance (JSA)

Income and financial needs are considered jointly when deciding whether or not the applicants are entitled to JSA. This also applies to same-sex couples who are living together as if in a marriage or civil partnership.

Income-based Employment and Allowance (ESA)

A husband/wife or civil partner may only receive income-based ESA if the usual entitlement conditions are satisfied, and the other partner works less than 24 hours a week on average.

Income Support (IS)

A husband/wife or civil partner may claim IS for themselves as well as for their spouse or partner. However, only one person in a family can claim IS at any one time. Income and financial needs are looked at jointly when deciding whether or not the applicants are entitled to IS. Depending on individual circumstances of the couple, several types of premiums are available.

Council Tax Benefit and Housing Benefit

Council tax benefit offers you a reduction in the costs of your council tax when your income and any savings are below a certain level. An assessment of your eligibility usually takes into account your husband/wife or civil partner’s earnings and any savings. You should contact your local council for further details about this.

Housing benefit offers financial support towards the rent on your home. If you live with your husband/wife or civil partner only one of you will be able to receive housing benefit.

Child Benefit

Since 5 December 2005, where a person is living with a same-sex partner as a couple - whether or not they are married or in a civil partnership and they are both receiving higher rate child benefit - the couple need to inform the HMRC Child Benefit Office as soon as possible. If HMRC is not informed within three months, the couple will not only have to pay back any overpaid tax credits but may also have to pay a penalty.

For further information contact Stonewall's Information Service.