Tomorrow is the “big day” and whatever your views about the coverage and national celebrations, I’m sure that most of us would wish Miss Middleton and Mr Windsor the very best for their future together. So, given that we are all very much aware of a certain wedding, perhaps this is an appropriate time to reflect on some of the tax issues surrounding “tieing the knot”.

David Pointer of Open Tax Consultancy explains..

Any transfer of assets between spouses or civil partners who are living together are treated as being made on a ‘no gain/no loss’ basis for Capital Gains Tax (CGT) purposes. This can therefore provide an opportunity to ensure that both spouse’s or civil partner’s personal tax allowances and basic rate tax bands are utilised efficiently, and allow assets to be transferred without an immediate tax charge. This also helps couples to make use of their CGT annual exemptions. For example quoted stocks could be transferred between each other, especially if only one of you is liable to higher rates of tax and the other is not. To work transfers need to be genuine with ‘no strings’ attached.

On the flip side there is a major capital gains tax disadvantage of being married or in a civil partnership. This relates to the principal private residence exemption. For CGT purposes a married couple or civil partners who are living together can only have one ‘main residence’. Where a couple have two properties which are used as residences, their main residence will usually be determined based on the facts and a CGT liability could arise on the sale of the second property. It is possible to submit an election within two years of acquiring the second property to specify which should be regarded as the principal private residence. This can then be varied at a later date as required.

For inheritance tax (IHT) purposes any gifts between UK domiciled spouses or civil partners during their lifetimes or assets left upon death to each other are usually not chargeable to IHT.

David also reminded me that …It is also important to note that marriage or entering a civil partnership invalidates an individual’s Will so once married new Wills should be considered. This is an excellent reminder to ensure that your Will is up to date. The highlighted links will open up my guide to Wills (not a personal guide to married life to the Prince, but how to prepare the legal document!).

Finally, let’s not forget that marriage is a legal contract, a couple enters into an agreement to share everything, including assets and liabilities as well as the bathroom! So with this additional responsibility, thought should be given to ensuring that adequate financial protection has been arranged, perhaps making sure that any employee benefit schemes are notified about changes to beneficiaries. Of course, it would be very sensible to have a proper financial review that takes account of joint priorities and any plans for a family. These all have a dramatic impact on financial planning and the sooner that they are discussed thoughtfully the better. Something, that I obviously do with clients.

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