Over the last 20 years, the number of over 70s choosing to cohabit with their partners rather than marry or enter civil partnership has increased by nearly 300%, and by doing so could inadvertently be putting their homes at risk.
Figures show that 45,066 people over the age of 70 were cohabitating with their partner in 2002 in England and Wales, but this figure jumped to over 175,000 in 2020 as marriage has declined and cohabitation lifestyles have steadily increased in popularity. No doubt, statistics here in Cyprus will demonstrate a similar scenario.
Maplebrook Services has experienced an increase in advising unmarried couples over the age of 65 that their homes are potentially subject to UK inheritance tax when one partner dies, leaving their share in a joint home to the surviving partner.
This UK tax liability would be due within six months, and so for many might mean that as well as dealing with the loss of a loved one, they may be forced to sell their home, and quickly. A quick sale will almost inevitably mean having to reduce the price of the property, which is doubly upsetting for those already grieving the loss of a loved one. Cohabitants need to put real thought into how they address this problem.
Cohabiting without a formal contract of marriage or civil partnership
Although there may be social and other obligations, without a formal contract of marriage or civil partnership, there are few automatic rights over money or even things like a shared home. If one partner owns a property in their name alone, the surviving partner has no clear right of ownership or habitation if the owner dies. In Cyprus, since 2015, unless your Will refers to adopting UK legislation with regard to immovable property, commonly referred to as Brussels IV, children and other family relations (even if estranged) would become entitled to a share of the property.
While to many the current rules seem outdated and unreasonable, under inheritance law, an estranged blood relative would have more rights over the estate than a cohabiting partner, and taxes also claim more legal rights to an estate than a much-loved partner.
But advice can be given to cohabiting partners. For example, arranging for a home in the UK to be in common ownership when it is first bought can ensure that neither of the pair go homeless in the worst case scenario.
For advice on the best way to arrange your affairs, please contact Wayne Barnett of Maplebrook Services Limited in Kissonerga, adjacent to House of Paws and a few doors away from Greenwoods the Butcher and Paphos Computers. Telephone 99147650 / 26600780 or email: info@maplebrookservices.com. Alternatively please fill in the contact form below and we will be in touch with you promptly.