Buying a house jointly prior to marriage

[TheCyclingProgrammer]

I'm getting married in April and we are intending to buy our first house together in May/June if we can find the right place, as I've mentioned on here before (re: mortgages).

I've now had a couple of good mortgage deals through and although rates could change over the next 5 months, its looking likely we should have no issues getting a mortgage.

So my question is, even though its unlikely, if we found somewhere we loved and decided to go ahead with the purchase *before* we got married, are there any tax or legal implications to this that I should be aware of (I'm mainly thinking CGT or IHT)? We both have mirror wills with each other as the main beneficiary and the wills were also made in contemplation of our marriage so will continue to be valid once we are married, if that makes any difference.

[SueEllen]

If one of you dies before you get married IHT would be the least of your worries.

Just remember there is no such thing as common law husband or common law wife in England so your IHT is like two people who aren't in a couple.

Companies only ask if you are coupled up as statistically that makes you a higher or lower financial risk depending on the product.

[Jessica@WhiteFieldTax]

Assuming you both move in, and there are no other complications, or that you don't own other homes, then there are no CGT issues.

There is a small risk of an IHT issue, in that mirror wills for a married couples mean the sum passing is exempt from IHT, however for an married couple there is no spousal exemption so IT arises if either of you has an estate over the IHT limit (Currently £ 325k).

[TheCyclingProgrammer]

If one of you dies before you get married IHT would be the least of your worries.

Just remember there is no such thing as common law husband or common law wife in England so your IHT is like two people who aren't in a couple.

From an IHT perspective, neither of our estates would exceed the IHT threshold. But you say that's the least of our worries - what else did you have in mind?

I'm aware there is no such thing as common law husband/wife - that's why we got wills written.

I guess what I was trying to establish was that, if we bought together before we got married, once we were married, that for all intents and purposes we would be in the same situation as if we'd bought after we got married (i.e. there are no strange timing issues relating to when the house was purchased).

[mudskipper]

We did the same - the solicitor recommended a joint tenancy agreement. But that was 1990, so things may have changed...

[BrilloPad]

Always change your will post marriage.

[ASB]

Always change your will post marriage.

I dont think its generally realised that a will is revoked automatically by marriage *. Thus a lot of people who think they have a will dont and will be intestate. Divorce doesnt revoke a will, but it does have an impact on it.

* tcp has this covered. If a will is made in anticipation of marrying a specific person and that happens then the will is not revoked provided it is written correctly.

[BrilloPad]

I dont think its generally realised that a will is revoked automatically by marriage *. Thus a lot of people who think they have a will dont and will be intestate. Divorce doesnt revoke a will, but it does have an impact on it.

* tcp has this covered. If a will is made in anticipation of marrying a specific person and that happens then the will is not revoked provided it is written correctly.

And default will is not good for spouses. Definetly worth updating. Its quite cheap to get a will updated.

[TheCyclingProgrammer]

And default will is not good for spouses. Definetly worth updating. Its quite cheap to get a will updated.

Can't imagine anything in our will that would need to be changed post-marriage. I leave everything to her, she leaves everything to me, then all the various what-if scenarios if we go together (to our children) or the whole family (to various siblings). Would you care to elaborate? What do you mean by "default will"? We had quite a detailed meeting with our specialist will writer and went over probably everything we could think of.

[ASB]

And default will is not good for spouses. Definetly worth updating. Its quite cheap to get a will updated.

As a general point that is very true. Iirc only 150k goes to the surviving spouse under intestacy. The rest gets divied up with bits potentially going tp kids, aunts, uncles etc. Not necessarily ideal.