What is a ‘Common Law Wife’?
It is a myth that a ‘common law wife’ exists under English law. Many clients are shocked to find out that English law does not recognise a cohabiting couple in the same way as a married couple. This article dispels the myths
of the ‘common law wife’ and explores the rights of unmarried expat couples. The financial implications of living as an unmarried couple are as follows:
Tax consequences for unmarried couples
Married couples living in England are exempt from certain taxes such as Capital Gains Tax (CGT) and Inheritance Tax (IHT) if the intended recipient is their spouse.
Cohabiting couples are perceived by the taxman as two individuals. This means they are liable to pay CGT and IHT if they wish to sell their assets to their partner or leave an asset to their partner when they die.
Death of a partner
In England, if a married person dies without writing a will then their spouse will have an automatic right to inherit their estate.
On the other hand, a cohabiting partner is not entitled to the same automatic right and may not inherit anything from their partner if there is no will.
Separation and financial claims for unmarried couples
When a married couple divorce, under English law, the less wealthy of the two spouses is entitled to make financial claims against their spouse’s capital and income for their own needs.
When a cohabiting couple separate, neither can make a financial claim against the other as a result of the relationship. The phrase ‘cohabitation pot’ does not exist. It does not matter how long you have been together, the law simply does not allow you to make a claim for yourself against your partner’s capital and income as a result of your relationship alone. However financial claims may be available in the following circumstances:
- Establishing a ‘beneficial interest’ in a property owned by your partner: If you have lived together in a property owned by your partner and then you separate, you may be entitled to claim a share of that property if you have established a ‘beneficial interest’ in it, by contributing to the property in some way (e.g building a new kitchen, remodelling interiors, paying the mortgage) or if it is clear that you intended to financially share the property and jointly benefit from it.
- Establishing your share of a property jointly owned: If you and your partner jointly own a property, you may not necessarily be entitled to 50% of the value of this property on separation. If one of you contributed more to the property, they may successfully argue that the value should not be shared equally. It is important to have an express agreement as to your respective shares (a written agreement or on the title deeds for the property).
- Financial provision for the children of unmarried parents: an unmarried parent may under English law make a claim against the other parent for financial support for their child/children. Such claims (under Schedule 1 Children Act 1989) may include maintenance, school fees, ‘carer’s allowance’ for the parent living with the child, and if appropriate a capital sum to purchase a property for the child to live in until they become dependent.
Children of unmarried couples
Married fathers automatically obtain parental responsibility for their children under English law.
If an unmarried father is not registered on the birth certificate then they do not obtain parental responsibility for their child unless it is ordered by a court or by a parental responsibility agreement. Nonetheless an unmarried father must pay child maintenance should he separate from the mother of his child under English law.
Click here to read our article on ‘6 Essential tips for unmarried expat couples’, or email us at firstname.lastname@example.org for confidential and clear advice.