Now series 5 of Love Island has come to an end, you no longer have an excuse to leave the dishes and forget to put the bins out. In fact, can you even remember what you used to do with all that spare time? If this sounds like you then you are not alone, with bumper ratings, this year’s Love Island was the most-watched ever with a massive 3.8 million viewers.
Amber and Greg were the surprise winners of the 2019 series, beating favourites Molly-Mae Hague and Tommy Fury in a shock twist, but you already know that!
Whilst Love Island may be over for the viewers, it has likely only just begun for the contestants; as they grasp the opportunity for fame and fortune. The media will keep us updated on their blossoming relationships.
How will they cope outside of the Island, will the UK weather put a dampener on things, will reality sink in? Most importantly, if they do separate, are there any financial implications for them to consider?
For those ‘whirlwind romances’ that are bound to fizzle out, they will have likely continued to be very independent financially and simply go their own way. However, what about those that last some distance or those that certainly last long enough sit and watch series 6 and 7 together? Those that build longer-term relationships, whether they marry or not, there will be legal and financial implications if they were to separate.
There have been many recent cases reach the courts of couples who have separated and although were not married, have had to agree to settlements. Contributions to property lived in but perhaps only legally owned by one of the couple and cases where one partner may have had their career impacted to allow the other to progress theirs, have been successful in receiving a settlement.
In addition to the legal aspect and the financial involvement of separating assets, tax is also a significant issue on separation for both those who are married or in a civil partnership and those who are not.
Whilst not the most romantic reason to pop the question, marriage and a civil partnership do have many tax advantages but when two people split up, very quickly the position can change substantially. The timing of separation and seeking advice is critical to being able to consider some quite basic planning and avoid a tax headache. In addition, there are certain reliefs to prevent families from being in a disadvantaged position, such as relief in some cases that allow a couple to separate and one party purchase a new home whilst remaining owner of the old home, and not incur the additional SDLT 3% surcharge.
When it is already a difficult time, tax may be the last thing for a couple to consider however, it is important to seek specialist advice to ensure you understand your tax position, have no hidden surprises and do not miss the opportunity to save tax. In such a situation, ‘it is what it is’ is unlikely to cut it.
Would you like advice on how separating with your partner can affect your tax position?
If this blog has covered some areas you would like to discuss and better understand, then our tax team at Ellacotts are experienced in dealing with the tax consequences of separation. Being able to provide professional advice in a sensitive manner at a difficult time. For more information please contact us by email or on 01295 250401.