Taxation of cohabiting couples
Introduction
You are cohabiting if you are living with someone in a committed relationship but you are not married or in a civil partnership.
You can read more about the legal rights of cohabiting couples.
How cohabiting couples are taxed
Cohabiting couples are not taxed the same as married couples or civil partners. In general, they are taxed as single individuals.
Income tax
Married couples can share their tax reliefs and allowances between them. Cohabiting couples are taxed as single individuals.
Read about how your income tax is calculated.
Capital Acquisition Tax
Capital Acquisitions Tax (CAT) is a tax on gifts or inheritances. Transfers between spouses and civil partners are exempt from CAT.
If you get a gift or inheritance from a relative, it is tax free up to a certain amount depending on the relationship.
If you get a gift or inheritance from your cohabitant, it is taxed in the same way as if it was from someone who is not related to you. The lowest tax-free threshold applies.
If your cohabiting partner dies when you are still in a relationship together, you may be able to apply to court for a portion of their estate. A gift or inheritance is exempt from CAT if it is made by court order in this way under the redress scheme for cohabiting couples.
Tax reliefs for former cohabitants
If your cohabiting relationship ends, you may be entitled to tax relief if a court orders:
- You to make maintenance payments to your former partner
- A transfer of assets between you
To be a qualifying cohabitant for these reliefs you must have been cohabiting for at least:
- 5 years or
- 2 years if you are the parents of a dependent child
Maintenance payments
If you make legally enforceable maintenance payments to benefit your former partner, you can deduct them from your income to reduce the tax you pay.
Read more about how maintenance payments are taxed.
Property transfers
If a court orders your former cohabitant to transfer property to you, you do not have to pay Capital Acquisitions Tax or stamp duty.
If a court orders you to transfer an asset to your former cohabitant, you do not have to pay Capital Gains Tax or stamp duty.