Civil partners now have similar rights to married couples in relation to Inheritance and Capital Gains Taxes, wills, trusts, pensions, insurance, housing and immigration. For example, civil partners will be able to accrue survivor pensions in public service schemes and contracted-out pension schemes, and also be able to transfer assets to their partner without Inheritance Tax. But though pension and tax are the most important financial areas affected, there are also implications for protection products.We’ll soon be seeing the option to select ‘civil partner’ alongside ‘married’ on all forms. Of course, application forms for protection products are no exception. Also affected will be the guaranteed insurability options offered on many protection policies. Policies frequently include an option to increase the amount of cover after a marriage without the need for medical underwriting. These options will need to be extended to people entering into civil partnerships. Civil partners will have rights when it comes to state benefits. If someone receives certain benefits, they may qualify for additional benefits for their civil partner. Though state benefits are set at a level intended to cover a very basic standard of living it is still important to consider them when planning your clients’ protection arrangements, for example if you are setting up an income protection policy in which the maximum cover takes state benefits into account. There will also be changes when it comes to insurable interest. Until now, people have an unlimited insurable interest in their own life and that of their husband or wife. The Act extends this to civil partners. This means they will be able to take out any amount of life or critical illness insurance (within the financial limits of the policies) on the life of their civil partner allowing ‘life of another’ policies to be used, perhaps as an alternative to trusts. Trusts and the law of succession will also be affected. Trust arrangements that refer to spouses will not automatically include civil partners as beneficiaries and may need to be reviewed but just as a marriage (in England) dissolves a will, so does a civil partnership. There will be changes to child legislation regarding parental responsibility. As always, when children are involved, parents must ensure they have a financially secure future. This is a great opportunity for advisers.
Last week I discussed clients buying premises via their pension funds. Of course, not everyone is fortunate enough to have sufficient resources to purchase business premises but there are now more opportunities than ever for business people to raise commercial finance to buy premises for their own business use.
More than half of all home owners do not understand how a tracker mortgage works and could be missing out on the benefits, says Alliance & Leicester. Research carried out by the lender shows over 8.4 million home owners do not know how a tracker mortgage would affect their monthly repayments. This comes as the […]
From Guy Garrard Since the dark uncertain days of November 2004 and the advent of the new world of regulation there has been something nagging at the back of my mind about our world of transparency and Treating Customers Fairly. It’s been there now a year and the nagging is now reaching spouse-like proportions. Quite […]
The Office of Fair Trading is to carry out a market study to look in depth at the payment protection insurance sector. The market study, which is the outcome of the OFT’s consideration of a super-complaint from Citizens Advice, will be launched early in 2006.PPI is applied to a number of credit products, including mortgages, […]
A report published this morning by the CIPD (CIPD Employee Outlook March 2015) provides yet more interesting data to the changing landscape of retirement planning. It should be remembered that we are in a period of genuine flux here given that the default retirement age was scrapped three years ago, and new pension freedoms come online in April. Both of these alterations will have a huge impact on how employees plan for their retirement.
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