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Marry Your Friend to Save Tax 
and Share Pensions 

By Paul Farrow, money.telegraph 

United Kingdom

November 23, 2005

Elderly people who live together could reap huge financial benefits when the Civil Partnership Act comes into force next month, according to the Association of Chartered Certified Accountants.

From December 5 the new law will allow same-sex couples to enjoy the same legal rights as married couples in matters such as pensions and tax. But while the headlines have focused on legitimising "gay marriage", the new law will also allow platonic friends to register as civil partners and reap the same financial gains, said the association.

The ACCA said the new law will enable partners to enjoy most of the same state pension rights as husbands and wives and the same entitlement to a survivor's pension from an occupational or private scheme currently enjoyed by a widow or widower. It added that they will also be entitled to the same tax benefits as a married couple, being able to transfer assets without incurring inheritance tax, and will be able to take advantage of their partner's capital gains tax allowance.

John Davies, the head of business law at the ACCA, said: "This loophole could be of interest to, say, two elderly people of the same sex who live together for no other reason than company and sharing costs. With rising house prices catching people with inheritance tax, they could effectively 'marry' and as well as the estate passing to the friend on death free of duties, the friend can also lay claim to the dead partner's pension rights." 


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