Civil Partnership, PACS or Marriage: Will My PACS Be Recognised in the UK for Inheritance Tax?

Until recently (late 2019) it was not possible to enter into a civil partnership if you were a heterosexual couple. If you wanted legal protection and recognition of your relationship it was necessary to get married.

A change in the law, bought about by campaigning, now allows for heterosexual couples to enter into civil partnerships.

If you enter into a civil partnership, the legal rights that you get are broadly the same as marriage.

From an inheritance and succession point of view this means that if you die without a will, your civil partner will have inheritance rights.

If you make gifts during your lifetime to your civil partner, or they inherit from you on your death, all these gifts and inheritances are exempt from inheritance tax.

Heterosexual couples living in France have had the option to enter into a PACS for many years. As in the UK, once you have entered into a PACS, you have the same gift tax/inheritance tax allowances as a married couple.

You do not, however, gain any inheritance rights, so it is strongly recommended that you make a will to ensure that your civil partner is looked after.

Further to the 2019 change in law, a PACS between both opposite and same sex couples, will now be recognised in the UK as equivalent to a UK civil partnership.

This means that if you were PACS’ed in France and leave your UK-located home to your civil partner, they will not have to pay UK inheritance tax following your death.

As the UK inheritance tax rate, after the estate’s tax-free limit, is generally 40% it can provide a huge saving to your partner at what is likely to be a difficult time.