The Financial Benefits of Being Married in the UK

It is officially 13 years today since I met Dr Chris on a blind date. It wasn’t initially a fantastic success - I was actually wondering how to leave the date without being too rude but I didn’t manage it and the rest is history…

We got married six years later and I have to say, I love being married. I’m never sure how much difference it actually makes for us - we’re not planning on children, I didn’t take his name, we’ve not totally combined finances - however, it definitely made the move to Sweden smoother. 

There are also still financial advantages to being married, albeit fewer than there used to be. Whilst saving on tax is a terrible basis for a relationship (probably not something to write in the wedding speech) it’s always worth being aware of them so that you can take advantage but also to make considered decisions about the relationships you enter into.  

Just before we start: I'm a financial coach, not a regulated financial adviser, so nothing here is personal advice - it's general information about how the system currently works, correct for the 2026/27 tax year. If any of this is relevant to a real decision you're making, it might be worth talking to an adviser or accountant who can look at your actual numbers.

1. The Marriage Allowance (small, but free money is free money)

If one of you earns under £12,570 a year (the personal allowance) and the other is a basic rate taxpayer, the lower earner can transfer £1,260 of their unused personal allowance to their partner.

That's worth up to £252 a year off the higher earner's tax bill. It's not life-changing, but it is genuinely free and it takes about ten minutes to claim online through HMRC, and you can backdate it up to four tax years if you've been eligible and never claimed - so for some couples that could mean a lump sum of over £1,000! Not bad.

If one of you is a stay-at-home parent, a carer, a student, between jobs or just on a low income, it's worth checking today.

2. Inheritance tax: the unlimited exemption

This is the big one probably, and can feel a bit surprising. Transfers between UK-domiciled spouses or civil partners - during life or on death - are completely exempt from inheritance tax, with no upper limit at all. You could leave your entire estate to your spouse, however large, and no inheritance tax would be due on that transfer.

It gets better. If you die and leave everything to your spouse, you haven't used any of your own £325,000 nil-rate band (or your £175,000 residence nil-rate band, if you're leaving a qualifying home to children). That unused allowance transfers to your spouse too. So when they eventually die, their estate can potentially shelter up to £1 million combined between both of you, before inheritance tax kicks in at all. Unmarried couples, no matter how long they've lived together or how entangled their finances are, simply don’t get this. Cohabiting - even for twenty years counts for nothing here. This exemption is specifically, only, for marriage and civil partnership.

It is worth knowing that this doesn't make the tax disappear forever, it defers it to the second death, when the survivor's now-larger estate gets taxed in the normal way above the available thresholds. So it's not a loophole, it's a delay, but could be a very useful one for some families. 

3. Capital Gains Tax: moving assets without a tax bill

If you and your spouse are living together, you can transfer assets between each other - shares, property, investments - without triggering Capital Gains Tax. This is the ‘no gain, no loss’ rule. The person receiving the asset simply inherits the original cost for tax purposes, so the gain isn't taxed until they eventually sell it to someone outside the marriage. 

In practice, this means couples can move assets around between them to make better use of both of your annual CGT exempt amounts, or to make sure the asset sits with whichever of you pays the lower tax rate before it's eventually sold. It's an underused tool because people don't realise it exists.

4. ISAs: keeping the tax-free wrapper after death

Normally, an ISA loses its tax-free status the moment someone dies. But if you're the surviving spouse or civil partner, you get something called an Additional Permitted Subscription (APS) - essentially, an extra one-off ISA allowance equal to the full value of your late partner's ISA, on top of your own annual £20,000 allowance. It means the money doesn't just pass to you, its tax-free wrapper effectively comes with it. Again, this is specific to spouses and civil partners, not partners in general.

5. Pensions and state benefits

Marriage can also affect what you're entitled to when it comes to pensions - some older workplace and private pension schemes still pay survivor's benefits only to a legal spouse or civil partner, not a cohabiting partner, though this varies a lot by scheme, so it's worth checking the rules of any pension either of you holds rather than assuming.

There are also inheritance rules around certain elements of the state pension for people who reach state pension age under the old system, which again depend on marital status.

So, what do I actually want you to take from this?

Definitely not ‘go get married for the money’, obviously, but I do want you to know the system isn't neutral. It was built with marriage in mind, and if you're cohabiting long-term without marrying, or you're in a relationship where these questions haven't come up, it's worth understanding exactly what you'd be giving up. So you can make an active, informed choice about it, rather than an accidental one.

Whatever you decide, decide it on purpose, with your eyes open. That's really all I ever want for any of us with money.

Love Eleanor xxx