Whilst many were celebrating the end of a decade on 31 December 2019, Julie Thorpe and Keith Lomax from West Yorkshire were celebrating for a different reason; the pair became the first heterosexual couple to form a civil partnership, formalising their 37 year relationship.
In accordance with the Civil Partnership (Opposite-Sex Couples) Regulations 2019, opposite-sex partners were able to give notice of their intention to register a civil partnership from 2 December 2019 and, following the requisite 28 day notice period, the first civil partnership ceremony took place on New Year’s Eve of that year. The new regulations allow heterosexual couples, such as Julie and Keith, to form a civil partnership. Since the Civil Partnership Act 2004, civil partnerships have been available to same sex couples, so it’s refreshing this option to be available to everyone, regardless of sexual orientation.
The Office of National Statistics (ONS) released their annual statistics for 2019 on civil partnerships in England and Wales earlier this year, which for the first time take into account opposite-sex civil partners. It seems that opposite-sex partners have taken full advantage of the new law, with 167 opposite-sex civil partnerships being formed in England and Wales on 31 December 2019 alone. The numbers of same-sex civil partnerships have also continued to rise, with a 4% increase from 2018. The ONS report demonstrates the increase in popularity of civil partnerships and we can expect to see further increases in popularity in the statistics for 2020, as more opposite-sex couples choose to become civil partners.
Civil partners have the same rights, protections and recognition as married couples. Previously, an unmarried father didn’t automatically acquire parental responsibility for their child. The law now states that if a child’s mother and father were in a civil partnership at the time of the child’s birth, or later form a civil partnership, they’ll each have parental responsibility for the child. Similarly, unmarried fathers aren’t required to provide information to register their child’s birth, nor are they entered on the birth certificate unless certain conditions are met. Now, fathers in opposite-sex civil partnerships need to provide the required information so that they’ll be registered on the child’s birth certificate. This means they’ll be treated in the same way as married fathers.
For couples entering into a civil partnership, there may also be unforeseen consequences in relation to estate (Will) planning. It’s well-established that a Will executed prior to marriage becomes invalid on marriage. A civil partnership will have the same effect, revoking any Will made prior to the civil partnership. The only exception to this rule is explicitly making a Will in contemplation of the marriage or civil partnership. In this case, the Will would include a statement to confirm that it had been drafted in the full knowledge that a marriage or civil partnership to a specified person would happen within a reasonable timeframe, with the subsequent marriage or civil partnership then not rendering the Will invalid. These rules would apply equally to civil partnerships. It’s therefore important to consider the impact that a civil partnership may have on your Will and consider seeking advice from a solicitor.
From a tax planning perspective, it’s worth noting that there is an Inheritance Tax (IHT) exemption on assets passing from one civil partner’s estate to the surviving civil partner. Like married couples, civil partners can also make use of the transferable nil rate band and residence nil rate band. Further, for Capital Gains Tax (CGT) purposes, there can only be one main residence per civil partnership which means that, even if civil partners have two properties and live separately, ordinarily only one property would qualify for private residence relief.
For more information on nil rate bands, go to our IHT planning page here.
In the event that civil partnerships don’t work out, much like the divorce process for married couples, a civil partnership can be ended by a dissolution order. The ONS report shows that there were 916 same-sex civil partnerships dissolutions granted in England and Wales in 2019. The Court can make the same provisions for financial relief upon dissolution as they can upon divorce. This means that financial remedies such as periodical payment orders, lump sum orders, property adjustment orders and pension sharing orders are equally applicable to dissolution, as they are to divorce.
For couples looking to form a civil partnership, or those who have already formed one, it may be prudent to consider a pre-civil partnership agreement ("pre-cip") or post-civil partnership agreement (“post-cip”) to protect assets in the event of dissolution, or perhaps just give a degree of clarity as to what would happen to assets upon a breakdown of the partnership. Looking in more detail at the demographics of those forming civil partnerships, half of all individuals forming a civil partnership were aged 50 years and over. As individuals entering into civil partnerships are more likely to be older, a “pre-cip” or “post-cip” may be wise, in order to protect assets built up prior to the civil partnership or to ring-fence assets for children.
The introduction of opposite sex civil partnerships was undoubtedly a defining moment for many couples, where there’s now a personal choice to how the law recognises the relationship. With these benefits and rights, come new complex legal issues. Any couple considering a civil partnership should ensure they fully understand the legal implications of entering into a civil partnership and the wider implications of formalising their relationship in this way, giving due consideration – with the help of a lawyer specialising in family matters – to a “pre-cip”.
A monthly briefing from Irwin Mitchell
October 2020
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