Ricky Gervais: To Marry or Not to Marry?

Actor and comedian Ricky Gervais has reportedly announced that he is finally going to marry his long-term partner, author Jane Fallon. 

The couple have been together for more than 40 years, but according to recent reports, the decision to tie the knot isn't being driven by romance or religion. Instead, there is a rather more practical consideration…tax.  

When your estate is reportedly worth in the region of £140 million, the tax implications can be significant. 

It might sound like a rich person's problem, but the same rules affect ordinary families too — and many people only find out when it's too late. 

The Inheritance Tax Benefits of Marriage 

Inheritance Tax (IHT) is usually charged at 40% on the value of an estate above the available tax-free allowances.  

Everyone has a tax-free allowance of £325,000 (this is your nil-rate band), although other allowances and exemptions may also be available depending on the circumstances. 

One of the most valuable exemptions is the spouse or civil partner exemption. 

Assets passing between spouses or civil partners are usually exempt from IHT. This means that if someone leaves their entire estate to their spouse or civil partner, there will usually be no IHT to pay on that transfer. 

For someone with an estate of the size reportedly held by Ricky Gervais, that distinction could potentially be worth tens of millions of pounds. 

The “We’ve Been Together for Years” Myth 

This is where the law can come as a surprise. An unmarried couple does not benefit from the spouse exemption simply because they have been together for a long time. It doesn't matter whether they have lived together for 40 years, have children together, jointly own their home or consider themselves effectively married. There is no such thing as a "common law marriage" in England and Wales and For IHT purposes, there is no general "common-law spouse" exemption. 

By contrast, once a couple is legally married or in a civil partnership, transfers between them can qualify for the spouse or civil partner exemption. The exemption can apply to transfers made during their lifetimes as well as assets passing on death. 

There Are More Benefits Too  

Marriage and civil partnership can also provide access to the transferable nil-rate band. 

Where the first spouse or civil partner to die does not use all of their £325,000 nil-rate band, perhaps because their estate passes entirely to their spouse, the unused percentage can potentially be transferred to the survivor's estate. If 100% is available, this can currently give the surviving spouse a nil-rate band of up to £650,000 on their subsequent death. 

There may also be a transferable residence nil-rate band where the relevant conditions are met, potentially increasing the amount that can ultimately pass free of Inheritance Tax even further. 

Marriage as Estate planning? 

Getting married for tax purposes may not sound romantic, but the estate-planning benefits can be significant and they’re not just for the super-rich. Once you add together a home, savings and belongings, the total can climb higher than expected. With rising property values and frozen tax thresholds, many more modest estates can also face an Inheritance Tax liability.  

Our Inheritance Protection team can advise unmarried couples on Inheritance Tax, Wills and the options available to protect what they leave behind.

So, the question is: To Marry or Not to Marry?  

My advice has already resulted in three marriages.  

Sadly, I’m still waiting for the wedding invitations.