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Tax dodge fear for gay 'weddings'
Jan 31 2006
GAY "weddings" could be merely a cover for straight men and women to qualify for tax breaks, Birmingham legal experts claimed today.
City law firm Mills and Reeve said there was nothing to stop single friends of the same sex entering into civil partnerships to dodge inheritance tax.
Spokesman Matthew Hansell said there were clear financial incentives for straight friends to tie the knot because of a loophole in the new Civil Partnerships Act.
And he claimed it would be difficult for relatives to challenge the arrangement through the courts.
"I'm sure the Government never intended the law could be used in this way, it was aimed at the gay community," he said. "But they have created a loophole."
Mr Hansell said married men and women or same-sex couples in civil partnerships had an advantage because they could leave their estates to their partner free from tax.
But single people could only bequeath the first £275,000 tax free with the inheritor left to pay the Government 40 per cent of the remaining value.
If no will is made, a spouse or a civil partner has rights under the Intestacy Act. But Mr Hansell said unmarried people or those who had not registered their relationship would find it difficult to claim on a dead partner's estate.
