According to the Office for National Statistics, there were over 117,588 divorces in England and Wales in 2011. The effects for the numerous families involved in a divorce can be both emotionally and financially catastrophic. Can you imagine waking up one day to find yourself no longer in the home you built with your loved one? In this article, we will look at the financial benefits divorced couples lose out on and why it should only be considered a last resort.
In a recent Guardian article, Mike Warburton, a tax planning adviser at Grant Thornton said “The greatest tax planning strategy ever invented is getting married. All couples should plan for retirement on the basis of maximising both parties’ tax allowances, but for married couples and those in civil partnerships, it is considerably easier.”
What are these benefits that married couples enjoy?
Inheritance and Death
Probably the greatest benefit of marriage from a financial perspective is an easier time with inheritance tax and the potential misery your loved ones could suffer after you die. If you’re unmarried or are have spoken to a London divorce Lawyer about divorce, you can’t enjoy knowing your spouse will enjoy your assets without being taxed.
Property and Capital Gains Tax
If you own property, it is easier to save on capital gains tax if you make a profit on your investments. You can both take advantage of the £10,600 capital gains tax exemption to save on the tax, something unmarried couples and divorced individuals can’t do.
Maximises Income Tax Allowances
If you are married, it is incredibly easy to move your wealth between you and your loved one. Do this and you can take full advantage of all your tax allowances, saving thousands of pounds in the process. Even better, there won’t be any liability for inheritance tax.
You May Get a Better Pension
Another great advantage married couples enjoy is being able to get a pension based on their deceased partner’s contributions. If they were higher than yours, you can inherit their pension. Unmarried and divorced couples do not enjoy this benefit. Private pension rules may vary so check with their financial adviser.
If you are recently widowed and are under 45, you might be able to claim Bereavement Allowance. Divorced and unmarried couples are not eligible for this. You could get anything from £32.49 to £108.30 per week, depending on your age. This is payable until you reach the age when you can claim a state pension.
Divorce should only be considered a last resort until all the options have been explored. Family Lawyers will be able to offer peace of mind with the complicated legal processes involved and help you get your life back on track.
Bio: Alex Bright is a managing director at Brookman Solicitors. He Enjoys reading writing and doing anything