Love in later life and the inheritance tax trap

21 January 2026 | Wills, Trust & Probate | Author: Darren Perry

January is traditionally a busy month for family lawyers, a time when couples often resolve to start the new year by breaking up, but it’s a pattern no longer confined to younger couples. Divorce among over-60s - often referred to as silver splitters - has become an established trend, reflecting longer lives and changing expectations in later life.

Figures from the Office of National Statistics (ONS) show that divorces amongst those aged 65+ increased by 46% between 2004 and 2014. And while ONS no longer tracks the ages of divorcing couples, recent research by Legal & General shows that one in three divorces now involve somebody over the age of 50. But relationships in older age are not just about separation and endings, they are also about the opportunity for new beginnings, and for many that means living with a new partner.

The latest ONS figures highlight just how widespread cohabitation has become. Around 22.7% of couples in England and Wales were cohabiting in 2022, up from 19.7% a decade earlier, while the proportion of people who are married or in a civil partnership has fallen below 50%.

Increasingly, lawyers are seeing couples who have chosen to live together rather than marry, sometimes for many years, without fully appreciating how differently the law treats them, particularly when it comes to inheritance tax and financial protection on death.

Explained Darren Perry, Senior Solicitor at Fishers Solicitors: “What many couples don’t appreciate is that the law draws a sharp distinction between spouses and cohabiting partners when it comes to inheritance. There is no such thing as a ‘common law spouse’ for tax purposes and the financial impact can be huge for the survivor in a couple.”

Under current rules, assets left to a husband, wife or civil partner pass free of inheritance tax, regardless of value. By contrast, an unmarried partner may face a 40% tax charge on anything above the £325,000 nil-rate band. For homeowners and long-term partners, that can translate into a significant and unexpected bill at an already difficult time.

Alongside tax, pension entitlements can also differ, with some occupational schemes paying survivor benefits only to spouses or civil partners.

The issue often only comes to light at a late stage, sometimes when one partner is seriously ill and for some it may mean a rushed, last-minute wedding, with figures showing a steep rise in so-called ‘deathbed marriages’. The General Registrar’s Office recorded 836 such licences in the 12 months to end of June 2025, a 49 per cent increase on the 561 permits issued ten years earlier in the year to June 2015.

“While marriage is not the right choice for everyone, having a full understanding of the legal and tax consequences of cohabitation is essential, particularly for older couples with property, savings or pensions, and potentially two sets of children each looking to their inheritance,” added Darren.

“It’s about planning. Whether married, cohabiting or recently separated, taking early advice on wills, estate planning and financial protection can help couples avoid unpleasant surprises and ensure that personal choices don’t carry unintended tax consequences later on, which may be particularly hard on the survivor.”