HMRC internal manual

Inheritance Tax Manual

IHTM11032 - Spouse or civil partner exemption: definition of spouse and civil partner

The Inheritance Tax legislation does not define ‘spouse’ or ‘civil partner’ so the definitions come from general law. Consequently, the exemption applies to transfers between people who are lawfully married to each other at the time of the transfer (this includes same-sex couples from 13 March 2014 in England and Wales, 16 December 2014 in Scotland and 13 January 2020 in Northern Ireland) and to transfers between people who are civil partners at the time of the transfer.

Spouses include

  • people who are legally married but separated
  • parties to a valid polygamous marriage. The marriage confers the IHTA84/S18 exemption on all transfers to all the spouses of the transferor or deceased who qualify under IHTA84/S18. Where the IHTA84/S18 (2) limit applies because of foreign domicile of those spouses (IHTM11033), the total exemption (including any similar lifetime exemptions) may not exceed that limit.

The following are not spouses

  • people who are living together but not lawfully married, however long the relationship may have lasted (in England, Wales and Northern Ireland)
  • In Scotland the one form of irregular marriage that has been recognised by Scots law is that by cohabitation with habit and repute. This arises where a man and woman cohabit together as husband and wife and behave towards each other as such for a considerable length of time, so it is generally believed by the society and neighbourhood in which they live, and among their friends and relatives that they are married. They are then presumed to be married, although it is impossible to state precisely the place and a time when they exchanged the consent which is essential for marriage. Marriage by cohabitation with habit and repute was abolished by The Family Law (Scotland) Act 2006. It will remain an issue for the Courts for some time to come, however, since claims can still be admitted if based on a period of cohabitation that occurred before the commencement of the Act. If it is claimed that this common law style of marriage entitles the parties to the exemption under IHTA84/S18 (1) in either a death or lifetime situation you should refer the file to Technical.
  • parties to a bigamous marriage
  • people who were formerly lawfully married but divorced before the date of death/transfer

Civil partners are couples who have entered into a contractual partnership formally recognised by law under the Civil Partnership Act 2004 which came into effect on 5 December 2005. When the Act was introduced only same-sex couples could enter into a civil partnership.

With effect from 2 December 2019 the Civil Partnerships (Opposite-Sex Couples) Regulations 2019 extended civil partnerships to opposite-sex couples in England and Wales. The Marriage (Same-sex Couples) and Civil Partnership (Opposite-Sex Couples) (Northern Ireland) Regulations 2019 extended civil partnerships to opposite-sex couples in Northern Ireland with effect from 13 January 2020. On 28 July 2020 the Civil Partnership (Scotland) Act received Royal Assent, extending civil partnerships to opposite-sex couples in Scotland from 30 June 2021.

In addition to civil partnerships formed in the UK, the Act recognises some overseas relationships, in particular, the specified relationships listed in its own Schedule 20. Before the amending Regulations referred to in the previous paragraph, under Section 216 of the Civil Partnership Act 2004 it was essential that both the partners were of the same sex when the partnership was formed. Some overseas relationships were open to opposite-sex couples such as the French pacte civil de solidarité. In England and Wales, Scotland and Northern Ireland, the distinction is now no longer relevant from the date the applicable legislation came into force.

The term ‘civil partners’ will not apply to those individuals whose civil partnership had been dissolved by a court order before the date of death/transfer

Where a civil partnership can be converted to a marriage or a marriage converted to a civil partnership and the conversion converts one legal relationship into another, the parties will continue to qualify for the exemption. If it is not possible to convert a civil partnership to a marriage or vice versa and one of the parties dies before the new civil partnership or marriage is in existence, the exemption will not be available.

Any transfer between spouses or civil partners made on the breakdown of a marriage or civil partnership is covered by the exemption if it was made before the dissolution of the marriage by the decree absolute, or the dissolution of the civil partnership by the final order. You should note that dispositions between or for the benefit of spouses and civil partners, or former spouses and civil partners, on the breakdown of a marriage or civil partnership may not be transfers of value (IHTM04151) in view of IHTA84/S10 (IHTM04165) or IHTA84/S11 (1) (a) (IHTM04173).

Where the dispositions are made following a Court Order under the Matrimonial Causes Act 1973, the decision in Haines v Hill [2007] EWCA Civ 1284 at para 35 confirms that the applicant spouse’s right to apply for a property order is consideration equal to the value of the money or property that is to be transferred under the Court Order. As a result there is no loss to the respondent spouse’s estate in the first place and there is no need to rely on any exemption or other exclusion to prevent a transfer of value arising. Consequently, a settlement arising under a Court Order which gives the applicant spouse an interest in possession will be a relevant property trust and the spouse’s interest in possession will not form part of their estate in view of IHTA84/S49(1A) and IHTA/S5(1B). The same analysis applies to an interest in possession created in compliance with a Court Order under the Children Act 1989.