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HMRC internal manual

Inheritance Tax Manual

From
HM Revenue & Customs
Updated
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Lifetime transfers: gifts in consideration of marriage or civil partnership: relationship with spouse or civil partner exemption

Spouse or civil partner exemption (IHTM11031) may apply to a gift in consideration of marriage or civil partnership (IHTM14191) if

  • the conditions of the gift mean that it will only to have effect on the marriage or civil partnership taking place, and
  • no beneficial interest (IHTM04031) passes before the transferor and their intended spouse or civil partner are married or have entered into a civil partnership.

For example, Andy buys a house which is conveyed on trust for himself until marriage and then to himself and his wife Alice as joint tenants/joint owners beneficially. In this case, the gift to Alice is complete on marriage and the spouse or civil partner exemption applies.

On the other hand, a gift in consideration of marriage or registration of civil partnership may create a beneficial interest before the marriage or registration of civil partnership, although that interest may be defeasible, or voidable by the transferor if the marriage or registration of civil partnership does not take place.

For example, if Andy made a gift of a house in favour of his fiancée Alice ‘in consideration of marriage’, any loss to Andy’s estate as a result of the creation of the defeasible beneficial interest in possession is entitled to the exemption in consideration of marriage: the loss by the completion of the gift on marriage is entitled to the spouse or civil partner exemption.