Civil Partnerships For Straight Couples New for 2020

This year is not just the start of a new decade: 2020 is the first year that both same-sex and heterosexual couples can enter into a civil partnership.

Originally for same-sex couples, the law has now changed and heterosexual couples may opt for a civil partnership instead of a marriage – while enjoying similar legal protection and tax benefits.

The move came following the successful Supreme Court case of Steinfeld & Keidan, which saw partners Rebecca Steinfeld and Charles Keidan win their challenge that civil partnerships not being made available to straight couples was a violation of their human rights.

When the law came into effect hundreds of couples rushed to register for civil partnerships or convert existing agreements made in other jurisdictions to a full civil partnership.

However, with the expected take-up there are a host of legal realities that couples need to consider when entering a civil partnership such as whether they need a pre-nup, how to maximise inheritance tax benefits and what might happen to any existing cohabitation agreements.

Couples looking to enter a civil partnership should consider a pre-nuptial agreement; these set out the terms of financial settlement in the event of a future separation, and can now be drafted to apply in the context of dissolution of a heterosexual civil partnership.

Around half of marriages end in divorce and while the statistics on civil partnerships are still in the early days, for some couples it makes perfect sense to make an agreement that if they are to split, they will do so amicably and with an agreement in place – rather than fight it out when they are potentially at their most distressed.

Expert Opinion

“It’s likely that there are many straight couples, who have chosen to live together but not get married, who will now be considering a civil partnership.

“As a civil partnership is similar to marriage in terms of the legal protection it provides, couples should be aware that the dissolution of a civil partnership is also similar and assets, such as property or a business, will need to be protected.

“It’s best to sort out a pre-nup in advance of a civil partnership – while it may not seem like the most romantic of actions, it’s a practical agreement between the two people that will serve them well in the event of dissolution and help to make the potential heartbreak a little less painful.” Scott Halliday - Senior Associate

The law is also yet to be tested for straight couples with existing legal agreements in place, such as a cohabitation agreement, that are designed to give some sort of stability where the law falls short.

Scott added: “There are interesting implications for those couples who are living together and have existing cohabitation agreements in place when they form a civil partnership.

“If the civil partnership is then dissolved, it’s possible the courts could look at the partnership to have started when the cohabitation agreement was created rather than the start of the civil partnership, potentially giving extra rights to each party.

“There might also be issues around couples that have complex families, such as those who have remarried several times, and who will be looking to protect any assets for ‘their’ side of the family such as children from a previous relationship.

“All of these things will be tested as time passes and the first heterosexual civil partnerships are dissolved, but to avoid any doubt over the legalities, couples should consider asking a specialist solicitor about any issues.”

There are also valuable tax implications for those looking to enter a civil partnership. The inheritance tax (IHT) and capital gains tax (CGT) implications are generally very generous as they are with married couples, but careful drafting of the wills is necessary to lock in the additional inheritance reliefs available to civil partners.

For example, the surviving partner can claim the unused inheritance tax allowance of the predeceased partner, possibly doubling the amount of assets they can give away on death IHT-free.

The status of any partner’s children would also change to stepchildren, possibly opening up a further additional relief previously unavailable to couples.

Find out more about our civil partnership services here.