Civil Partnerships
The groundbreaking and much publicised Civil Partnership Act came into force on 5 December 2005. This provides that two people of the same sex can, for the first time, enter into a Civil Partnership which attracts rights and responsibilities akin to those afforded to married couples.
Entering into a Civil Partnership is a non-religious process, carried out by a registration service. It has two stages, with the first stage requiring the parties to give 15 days notice of an intention to register. The second stage is the registration itself. Civil Partnerships are concluded by the signing of a Civil Partnership Agreement in the presence of each other, the Registrar and two witnesses.
Entering into a Civil Partnership is a serious commitment and some of the potential consequences of doing so are listed below:
Wills
If a Civil Partner were to die without having made a Will, the remaining partner is granted equivalent rights to those of a widow/er under the Intestacy laws. Whilst this affords the remaining partner some protection it is still often an unsatisfactory outcome and Civil Partners should seriously consider drawing up Wills to ensure that on their death their assets are divided as they would wish.
For those Civil Partners who have already made a Will they should be aware that Wills already in existence at the time of entering into a Civil Partnership will automatically be revoked upon registration (although new Wills made before the event will be valid if they are expressed to be made in the expectation of registration).
There is also now the opportunity for Civil Partners to prepare tax efficient Wills as transfers between Civil Partners will qualify for relief from Inheritance Tax.
Please contact this firm’s Trust Tax and Probate Department if you would like to discuss the making or reviewing of a Will.
Tax
Couples who register as Civil Partners should also review their tax affairs. For example, in terms of Capital Gains Tax, same-sex partners who own more than one home may previously each have been able to claim a principal private residence exemption on different properties. This will no longer be possible as the tax treatment of Civil Partners has been brought into line with those for married couples.
There have also been changes for the purposes of National Insurance benefits and of means-tested benefits with Civil Partners now being treated in the same way as spouses.
Terminating a Civil Partnership
A Civil Partnership ends only on a formal dissolution or annulment, or on the death of one of the parties.
The process for dissolution of a Civil Partnership involves an application to court. No application for dissolution can be made during the first year of the partnership and thereafter either party can apply on the basis that the Civil Partnership has broken down irretrievably. Irretrievable breakdown is proved on the same basis as for a divorce; unreasonable behaviour; separation for 2 years with consent; desertion; and separation for 5 years, save that adultery is not available for dissolution. Orders for dissolution will be conditional in the first instance (a parallel to a 'decree nisi', in divorce proceedings) and may not be made final until 6 weeks later.
Either party can apply to court regarding financial matters once the dissolution proceedings have commenced. Provision for financial relief corresponds almost directly with the ancillary relief provisions available to divorcing couples. Either party can therefore apply for a maintenance, property adjustment, lump sum or pension sharing order.
When making any order on financial matters the Court's first consideration will be for the welfare of any child of the family who is under the age of 18. Subject to that the Court’s overriding objective will be to ensure that the parties’ financial inter-dependence is terminated as soon as possible - a "clean break" (as long as this does not cause undue hardship).
Pre-Partnership Agreements
In order to protect assets, or to record a financial agreement, couples planning on becoming Civil Partners may decide to enter into pre-partnership agreements.
As with pre-nuptials, a pre-partnership agreement which purports to restrict the financial relief available to the parties on termination of the relationship will be unenforceable. They will, however be considered by the Court as one of the factors in the case, and may carry some weight, particularly in cases where there are no dependent children.
Other co-habitants
It should be noted that the extension of partnership rights is limited to same-sex couples only. This act will not provide any protection to co-habiting couples of different sexes.
Many people still believe that there is such a thing as a common law husband and wife. This is not the case and if a partnership which has not been formalised by either marriage or civil partnership breaks down, the parties can be left without any legal protection, as regards financial matters. The law governing house ownership and co-habitants is very complicated, and solving problems relating to property can be very difficult and expensive. It is very important that before purchasing a home together, couples take full legal advice on the consequences of that purchase.
If you would like further advice on these matters please contact Karen Wallace (wallacek@s-yj.co.uk) on 0207 623 9490.
|
