Cohabiting couples ''face tax bills''

Couples who cohabit their home but are unmarried may be at risk from being stung by inheritance tax if one of them dies, according to a new study.

Advicenow, which researches cohabitation, has found that inheritance tax exemption rules do not apply to cohabiting couples even if they have been living together for a long time.

This news will shock the 55 per cent of couples polled by the research who believed that they have the same legal rights as married couples.

Mary Webber, from Advicenow, said: "Inheritance tax is no longer just a problem for the filthy rich. With the rise in house prices, more and more ordinary people are finding themselves landed with a bill."

She said it is a particular problem for cohabiting couples because they potentially have to pay tax on anything that they inherit from each other including property, savings, investments and personal possessions.

With a little tax planning though it is possible to reduce the amount of inheritance tax you have to pay or even avoid a bill altogether.


© Adfero Ltd