Congratulations on your big day! But if you thought that the planning, preparation and paying for your wedding was hard work, just wait until you try keeping a relationship for life harmonious. So often, the first forks in the road and subsequent disagreements are caused by matters of money. But with the financial implications of marriage often ignored, couples are often ill prepared for this. Don’t be those guys. With the help of Zoe Bailey, Director of Financial Planning at Tilney, here are 5 IDEAL finance tips for newlyweds.

BE OPEN ABOUT YOUR FINANCES

Let’s hope you’ve already been honest about the state of your bank balance and assets prior to tying the knot, but if you haven’t, you better start doing so soon. Indeed, before you begin looking at the different ways of combining your finances, it’s important to have an understanding of your partner’s financial situation, implicitly and without obstacle, as well as being open about your own. 

KNOW YOUR OPTIONS

There is no ‘one size fits all’ approach to incorporating you and your partner’s finances. In fact, there are various ways of combining your money – from a joint bank account, a combined account for utilities, joint savings, or simply having both names on financial products i.e. the mortgage. Married couples can also transfer assets between themselves, known as ‘interspousal transfers’, without triggering a tax liability. This can be used to shift savings and investments into whichever partner is subject to a lower rate of tax or to make use of two Individual Savings Accounts allowances.  

DECIDE THE BEST APPROACH TO MANAGING YOUR FINANCES

Some couples prefer if just one person takes charge of the money and manages the family finances. If you decide this approach works best for you, then make sure you’re both aware of what your outgoings are and be clear on your budgets, as well as what the responsibility of managing the family money actually entails. 

MAKE THE MOST OF TAX BENEFITS

While, of course, the primary objective of tying the knot is romantic, many couples recognise marriage as a tax efficient arrangement as well. And there’s nothing wrong with that. One tax perk comes in the form of marriage allowance, which is available to couples who are married or in a civil partnership and where neither person is a higher rate tax payer. The lower earner can transfer £1,250 of their annual tax free personal allowance to their partner – creating a tax saving of up to £250 a year – more than enough to cover a Valentine’s Day candlelit dinner for two in future years, hey?

‘TILL DEATH DO US PART

The tax benefits of marriage are not solely confined to the couple’s lifetimes. Though we don’t want to get morbid here, one of the biggest financial gains comes in the event of death. Unmarried couples can pass assets valued up to £325,000 upon death, but anything above this is subject to 40% inheritance tax. Therefore, if a partner is left a house that far exceeds this value, for example, they could end up having to sell it. However, a deceased spouse / civil partner can pass an estate of any worth to the surviving spouse without immediate tax consequences. It’s worth knowing, certainly.