Martin Lewis has issued a stark warning to unmarried couples living together, highlighting the significant inheritance tax benefits of marriage or civil partnerships. Speaking on his BBC podcast, the personal finance expert shared a story about a taxi driver named Joe, who got married after listening to Lewis's advice.
Lewis explained that cohabiting couples without legal recognition of their relationship miss out on two major inheritance tax advantages. First, any assets left to a spouse are exempt from inheritance tax. Second, unused inheritance tax allowances can be passed to a surviving spouse, potentially allowing couples to leave up to £1 million tax-free to their children.
Using an example, Lewis illustrated the difference: an unmarried couple with £1 million in assets could face a £200,000 inheritance tax bill, while a married couple in the same situation would pay nothing. He urged couples to consider marriage or civil partnerships to secure these financial benefits.
