Tax implications of marriage/civil partnership

STOP PRESS: Abolition of non-dom regime and introduction of residence-based IHT regime

Finance Act 2025 (FA 2025) which received Royal Assent on 20 March 2025, implements legislation to abolish the remittance basis of taxation and replace it with a residence-based regime, commencing on 6 April 2025. FA 2025 also replaces domicile as the key factor in establishing liability to inheritance tax. Other changes include amendment of the rules determining excluded property status, the abolition of protected settlements status of offshore trusts, and changes to overseas workday relief.

For information on these changes, see Practice Notes: The abolition of the remittance basis of taxation from 2025–26 and A new residence-based regime for IHT from 2025–26. See also: Finance Bill Tracking Service: Key dates (Finance Bill 2025) and Finance Act 2025.

Tax implications of entering into a marriage or civil partnership

Spouses and civil partners are taxed independently on their own income, earned and unearned, and any gains. Exceptions to the general principles apply to couples entitled to the married couple’s tax reduction for those born before 6 April 1935, individuals in receipt

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Latest Private Client News

HMRC updates manuals to reflect end of remittance basis taxation from April 2025

HM Revenue and Customs (HMRC) has published comprehensive updates to its Remittance Basis and Domicile Manual and Residence and FIG Regime Manual, reflecting that the remittance basis of taxation is no longer available from the 6 April 2025. The updates incorporate amendments to reflect that domicile is no longer a connecting factor in the tax system and includes new sections covering provisions 809RZA-D and 809VIA. Changes also clarify that while Business Investment Relief investments can be made after 6 April 2025, this relief will not be available from 6 April 2028. The amendments encompass extensive revisions to guidance on claims, quantification, and identification of remittances to reflect these legislative changes.

Private Client weekly highlights—3 April 2025

This week’s edition of Private Client highlights includes: (1) The government publishes a call for evidence as part of the independent review of the loan charge; (2) Analysis of Rukhadze v Recovery Partners GP Ltd, a landmark decision of the Supreme Court on the liability of trustees and other fiduciaries to account for unauthorised profits; (3) Updated HMRC interest rates for late and early payments; (4) The Office of the Scottish Charity Regulator’s announcement of a consultation for an updated charity accounting framework, and (5) DE and another v TE and another (by their Children's Guardian), a decision on the recognition of an overseas adoption.

Question of the week: What options are available to an individual who wishes to leave their residuary estate in a tax efficient way on trust for their spouse for life and then to benefit charity in a flexible way with the charitable beneficiaries being chosen by their trustees? Would the residence nil rate band be available to the estate?

This Q&A provides links to content which may be helpful when advising a client who wishes to leave their residuary estate to their spouse for life and then to charitable beneficiaries at their trustees' discretion.

OSCR announces consultation on updated charity accounting framework

The Office of the Scottish Charity Regulator (OSCR) and other UK charity regulators launched a consultation on 28 March 2025 for an updated Statement of Recommended Practice (SORP) for charity accounting. The new framework, effective from January 2026, introduces a three-tier reporting system based on income levels, new environmental, social and governance requirements, and changes to income recognition and lease accounting. The 12-week consultation seeks input from charities, auditors, trustees and stakeholders to finalise the framework, which will be published in autumn 2025.