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Martin Lewis Warns Unmarried Couples Face Costly UK Inheritance Tax Under Current Rules

He says only spouses or civil partners receive the full inheritance tax protections.

Overview

  • On his ITV show and social media, Lewis reiterated that transfers to a spouse or civil partner are exempt from inheritance tax, while cohabiting partners do not qualify.
  • He set out the key thresholds: a £325,000 nil‑rate band, an extra £175,000 when a main home is left to direct descendants, and a 40% rate above the allowance.
  • He explained that a surviving spouse can use any unused allowance from their partner, enabling many couples to pass about £1 million tax‑free when leaving a home to descendants.
  • Using a Hal‑and‑Lou example, he showed how an unmarried couple with £1 million of assets could face roughly £240,000 in inheritance tax that marriage would avoid.
  • He noted that only around 4% of estates pay inheritance tax and urged eligible married couples to claim the separate Marriage Allowance, worth up to £1,260 through backdating.