How does australian tax work in relation to cohabiting couples and property

[cazann100]

HI

 

me and my partner are a cohabiting couple who have no wish to get married yet, under uk law, have just found out that we have to or we risk loosing a vast amount of out assets in inheritance and cg tax should 1 of us die. Are the rules similar in oz or are they fairer?

 

thanks in advance for any response

[Parley]

There is no inheritance tax in Australia.

Are you talking about if you both own the property equally, or if only one of you own the property.

 

I think if you are not married it would definitely be adviseable to have a will in case the owner of the property died and want it to pass to the other one.

[cazann100]

There is no inheritance tax in Australia.

Are you talking about if you both own the property equally, or if only one of you own the property.

 

I think if you are not married it would definitely be adviseable to have a will in case the owner of the property died and want it to pass to the other one.

 

Hi Parleycross,

 

Thanks for the response. My partner has a house in a relatively expensive area in the UK that he rents out and he also owns our family home outright. We have been together for about 7 years and have a child. He wants to marry as do I but I am (or wasn't) in any hurry to do so as I don't really feel that it makes much difference to anything other than your pocket. However it was bought to our attention that,

 

1. the properties will not necessarily transfer to me or our daughter without a will (we must make sure we do this now instead of putting it off)

2. should he pass-on then we would be liable to pay 40% of the value above the base rate (which given the 2 properties and their location would be quite a lot) to the government in tax. These were supposed to be our security in later life as neither of us have a pension and they were also supposed to assist our daughter in her adult life. It feels very unfair that a committed couple should be penalised just for not getting married!

 

It looks as though we will have to tie-the-knot sooner than we planned. It feels a bit like a shot-gun wedding now though.

 

It's good to hear that Australia is fairer with its lack of inheritance tax, another reason to move in the near future, with any luck.

 

Thanks again

[NicF]

You only pay inheritance tax on amounts over £350,000, so you would get a fair amount tax free. I agree that the lack of recognition of defacto couples in the UK is rubbish though and was one of the things that made me want to get married when I was pregnant with my first child. There are other pitfalls of not being married in the UK that aren't the same in Australia as well. For instance you would not be considered as your OHs next of kin in the UK (this used to be the case at least, not sure if it has changed since I left).

[cazann100]

You only pay inheritance tax on amounts over £350,000, so you would get a fair amount tax free. I agree that the lack of recognition of defacto couples in the UK is rubbish though and was one of the things that made me want to get married when I was pregnant with my first child. There are other pitfalls of not being married in the UK that aren't the same in Australia as well. For instance you would not be considered as your OHs next of kin in the UK (this used to be the case at least, not sure if it has changed since I left).

 

 

Hi,

 

Yes it is still the same here. I will not be considered his NOK without a living-will (neither necessarily will our daughter). I really resent being forced to marry for financial reasons. Unfortunately the base rate of £325,000 before IT is due is far too low for 2 properties the SE of England and we would be liable for a substantial fee if the worst did happen. This revelation just makes me more determined to move ASAP.

 

Are NOK issues simpler with defacto partners in Australia as well?

[Skani]

Hi,

 

Are NOK issues simpler with defacto partners in Australia as well?

 

A defacto partner, including a same sex partner, is regarded as next of kin in Australia.

 

However, it is still essential to make a will so that one's assets are distributed according to your choice and not those prescribed by the laws of intestacy.