Braxted Park Estate Wedding Fair hosted by County Wedding Events
If you're newlyweds-to-be embarking on your wedding planning journey, pop along to...
Posted by Danielle Harvey on 27 July 2020
1. Be open about your finances
Before you start looking at the different ways of combining your finances, it's important to have an understanding of your partner's financial situation, as well as being open about your own.
2. Know your options
There is no 'one size fits all' approach to combining your finances. There are various ways of joining up your money – from a joint bank account, a combined account for utilities, joint savings, or simply having both names on financial products i.e. the mortgage. Married couples can also transfer assets between themselves – known as "inter-spousal transfers" – without triggering a tax liability.
3. Decide the best approach to managing your finances
Some couples prefer it if just one person takes charge and manages the family finances. If you decide this approach works best for you, then make sure you're both aware of what your outgoings are and clear on your budgets.
4. Make the most of tax benefits
While most people tie the knot for love, many couples recognise marriage as tax efficient arrangement as well. One tax perk is the marriage allowance, which is available to couples who are married or in a civil partnership and where neither person is a higher rate tax payer. The lower earner can transfer £1,250 of their annual tax free personal allowance to their partner - creating a tax saving of up to £250 a year – more than enough to cover a Valentine's Day candlelit dinner for two in future years.
The tax benefits of marriage are not solely confined to the couple's lifetimes. One of the biggest financial gains comes in the event of death. Unmarried couples can pass assets valued up to £325,000 upon death, but anything above this is subject to 40% inheritance tax. Therefore, if a partner is left a house that far exceeds this value, for example, they could end up having to sell it. However, a deceased spouse / civil partner can pass an estate of any worth to the surviving spouse without immediate tax consequences.
6. Think about the long-term
Discuss your future plans both immediate and long-term. This will help and encourage you both to save towards them. Whether it's a house deposit, a family holiday or retirement, create a savings plan to achieve what you'll need.
For more information visit tilney.co.uk
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