How some Olympians also beat the Taxman
21 October 2016 by Diane Rudd
It’s been a month since the Olympics and the Para Olympics finished and we have all been basking in the terrific GB medal haul and enjoying the athletes parades this week. So far as the competitions were concerned all athletes faced a level playing field however when facing the Taxman the field is sometimes far from level.
Many of us will have seen the lovely Wedding photos of the 10 times gold medallist cycling couple Laura Trott and Jason Kenny. There have been many opportunities for them to earn substantial sums from sponsorship, adverts etc and it is a known fact that so far Laura has been able to earn much more than Jason. They have been together since the London Olympics but until they recently married they were in a potential difficult position with the Taxman. If Laura had died prior to her marriage and had left assets to Jason he would have been faced with a potentially large Inheritance Tax bill.
Although the term “common law spouses” is well known it has no legal basis and spouses have to be legally married couples in order to obtain partial or full Inheritance Tax benefits. This applies equally to same sex married couples such as gold winning hockey players Kate and Helen Richardson-Walsh. Civil Partners also benefit – although they are now married Olympic presenter Clare Balding was for 8 years the Civil Partner of the radio personality Alice Arnold and even before their marriage they would have benefitted from the Tax Rules.
Prior to Laura’s marriage she had an Inheritance Tax allowance of £325,000 and anything above that, including her half of any assets held in the joint names of herself and Jason such as perhaps their house in the North of England, would have been taxed at 40%. At a stroke therefore her marriage removed any Tax on assets that passed to Jason no matter what the value of them.
For couples who have not yet married – such as double gold winning gymnast, Max Whitlock and his Fiancée, Leah, or the diver Tom Daley and his Fiancé, Dustin – there are considerable IHT advantages to marry, have a civil marriage or a civil partnership although these may not be the most romantic reasons to tie the knot.
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