The Civil Partnership Act 2004

As from the 5 December this year (2005) The Civil Partnership Act 2004 will allow same sex couples to apply for legal recognition of their relationship.  It must be understood that this is not an option for opposite sex couples, nor is this something available to someone who is already married, and nor is it, the Government stresses, a “gay marriage”.  The rights and responsibilities which attach to a civil partnership under the Act will where possible mirror those attaching to a marriage, although it is understood that the two will never be equated.

As is expected much of the Act focuses upon the mechanics for entering into and exiting from a civil partnership.  A civil partnership will begin in much the same way as a civil marriage, with two witnesses present in a non religious setting, and the signing by the civil partners of a civil partnership document.

As with a marriage a civil partnership will revoke an existing Will made by either party unless made in contemplation of the civil partnership.  Other provisions of the Wills Act have been amended, and in the event of the death intestate of a civil partner, then the Intestacy Rules have been amended, so that the surviving civil partner is treated in the same way that a surviving spouse would be treated under the present rules of intestacy.  (It is worth noting incidentally that the Intestacy Rules are currently the subject of a Law Commission).

Furthermore, a civil partner’s claims under the Inheritance (Provision for Family and Dependants) Act 1975 will be similar to those of a surviving spouse, that is to say a claim for “reasonable financial provision” rather than a claim limited to maintenance.

The termination of a civil partnership will be almost identical to divorce, but will be known as Dissolution, and the Courts will be given wide powers with regard to the division of the couples assets.

On the tax front the consequences of civil partnerships are yet to be decided, but the Government has said on a number of occasions that its intention was to ensure equal tax treatment for civil partners and married couples, and that measures would be introduced to achieve this as soon as possible.    This has in fact been anticipated in the Finance Act 2004 which enables the Treasury to amend existing tax legislation.  It is expected that when amended, the tax legislation which applies to civil partnerships will follow very much the existing legislation which applies to married couples, including perhaps the surviving spouse exemption under the Inheritance Taxes Act.  As a consequence, perhaps for the first time, same sex couples will be in a position to consider tax planning in much the same way that married couples can now do.

Interestingly, and perhaps controversially the group that is left behind in all of this is the heterosexual couple living together who are not married.  Married couples and same sex couples by virtue of the new Act will have certain special treatment, but this will not apply to heterosexual couples living together, the so called but mis-named “common law husband” and “common law wife”.

As ever this is a specialised field and those contemplating taking advantage of the Civil Partnership Act 2004 and the benefits and burdens which flow from it, are well advised to seek specialist legal advice, because there are still traps lying in wait for the unwary not least the potential loss of a principal residence relief from capital gains tax, where a same sex couple would perhaps enjoy that relief on two different properties, and one of those might be lost on entering into a civil partnership.  For this and any number of reasons, it is better to consider planning before entering into a civil partnership.

David Endicott
November 2005