Despite the fact that an increasing number of couples choose to live together, there’s a lot of confusion about the rights of cohabiting couples. If you live together in England, Wales or Northern Ireland, you have very few rights indeed.
Your rights if you live together
If you live together with your partner, you have very few rights. However many people assume that they have some rights as a result of living together. Here are some of the myths about living together, and an explanation of what rights you actually have.
Myth 1: You’ll be entitled to a share of your partner’s property
If you live together, you don’t automatically become entitled to a share of your partner’s property. It would come down to whether you had any agreement (written or verbal) about what happens to the property if you split up. It would also depend on whether one partner had paid towards the mortgage or provided money towards the deposit, or if both partners had contributed.
If you want to protect your financial position, you should have a conversation with your partner when they move in with you or you move in with them. Ideally, get something in writing. It doesn’t have to be drawn up by a solicitor.
Myth 2: If you break up, you can simply divide everything equally
You may be able to divide everything equally, but there’s no guarantee that will happen. If the break-up is acrimonious, your ex partner may fight your attempts at a ‘fair’ split. There are no cohabiting laws that set out who should get what.
If you contributed towards the cost of the house (such as paying the bills etc.), you would have to be able to show that there was an understanding or agreement that you would be entitled to some of its value, otherwise you would get nothing.
SAVVY TIP: If you want to minimise the stress and disagreement over who gets what, it’s worth drawing up a ‘living together’ agreement. You can ask a solicitor to do it for you or find out how to make a living together agreement from the independent information and advice service Advicenow.
Myth 3: You will automatically inherit money or property from your partner when he or she dies
If you live with your partner, you have no automatic right to any money or property that they own if there’s no will. Your partner can leave whatever he or she wants to in their will, but without a valid will, you won’t automatically inherit anything. This is different to if you’re married or in a civil partnership.
SAVVY TIP: The only exception is money or savings you own jointly. In that case, the surviving partner automatically inherits. With property, you’d only automatically inherit if it was owned as joint tenants if you’re in England or Wales or owned jointly with a survivorship clause if you live in Scotland.
If your partner dies without leaving a will, you’d have to go to court to claim a share of their estate. If you’d lived together for two years before he or she died and you live in England or Wales, you could make a case if you went to court under the ‘Inheritance (Family and Dependants) Act of 1976’.
In Scotland, a change in the law in 2006, with the introduction of the Family Law Act made it easier for someone to go to court to claim a share of their deceased partner’s estate, but there’s still no guarantee that you would be awarded anything by the courts.
SAVVY TIP: Make a will. It’s the only way you can guarantee that your partner will inherit after you’ve died.
Myth 4: You have rights if you and your partner have lived together for two years or more
It doesn’t matter how long you live with your partner, you won’t automatically get any rights because you cohabit. The only rights you do acquire after two years is the right to go to court for a share of your late partner’s money and property if he or she dies and hasn’t left you anything in their will, or they haven’t left a will. However, it doesn’t guarantee that you’ll get anything.
Myth 5: You don’t have to pay inheritance tax on anything that you inherit from your partner
You may have to. Everyone has their own inheritance tax allowance. That is the amount of money you’re allowed to leave behind when you die without incurring an inheritance tax bill. If you’re married or in a civil partnership, everything you leave to your husband or civil partner is free of inheritance tax.
In the 2019-20 tax year, the basic inheritance tax allowance is worth £325,000. If your partner leaves money or property worth more than that, there will be an inheritance tax bill.
SAVVY TIP: If you want to try and reduce your inheritance tax bill, take expert advice from a solicitor or accountant who specialises in this area. There are steps you can take, but sometimes they can be complicated and costly.
Myth 6: You’re automatically entitled to inherit your partner’s company pension
You may be entitled to a percentage of the works pension that your partner would have received at retirement, but it’s not guaranteed. It will normally depend on the rules of the individual pension scheme.
Most pension schemes will pay a pension to a scheme member’s partner if they were financially dependent on them, but if you don’t fall into that category you may not receive a penny.
Myth 7: You can give away assets and valuables to your partner and you won’t have to pay capital gains tax
Married couples and civil partners can give assets to each other, such as property, shares etc., as a way of reducing a potential capital gains tax bill. But couples who live together can’t try and cut their capital gains tax bill by transferring assets from one partner to the other.
Citizens Advice has a guide to the legal differences of living together and marriage (in England and Wales). There’s also a section on relationships on the Citizens Advice Scotland website and you can find out about the differences between living together and marriage if you live in Northern Ireland.
The free independent advice website Advicenow has a section on living together with a wealth of user-friendly information.
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