Inheritance Tax for unmarried couples: why Ricky Gervais might follow Ken Dodd

Ricky Gervais and his partner, author Jane Fallon, have been together for more than 40 years. They’ve never married. But in August 2026, Gervais revealed that he might finally tie the knot for one reason: Inheritance Tax.

There’s a striking parallel with another comedian. In March 2018, Sir Ken Dodd married Anne Jones, his partner of 40 years, just two days before his death. Whatever his personal reasons, the marriage meant his widow could benefit from the Inheritance Tax exemption available to spouses.

Both stories highlight an uncomfortable reality for unmarried couples. You can share your home, your finances and much of your life with someone, yet be treated very differently from a married couple when one of you dies.

And this isn’t a problem affecting a small minority. According to the 2021 Census, almost a quarter of people living as couples in England and Wales weren’t married or in civil partnerships.

Why does marriage make such a difference to Inheritance Tax?

If you’re married or in a civil partnership, you can normally leave your entire estate to your surviving partner without paying Inheritance Tax on the first death.

Unmarried couples don’t have this exemption, no matter how long they’ve lived together.

Instead, Inheritance Tax can be charged at 40% on the part of your estate above your available tax-free allowances. The standard allowance is £325,000, although other exemptions and reliefs may increase it.

Married couples and civil partners can also transfer unused Inheritance Tax allowances to the surviving partner. Unmarried couples can’t.

There’s another widespread misconception worth clearing up. In England and Wales, there’s no such legal status as a ‘common law spouse’. If you die without a valid Will, your unmarried partner won’t automatically inherit your estate.

Getting married isn’t always a straightforward answer

For some couples, marriage might seem the obvious solution. For others, particularly those who have been through a divorce, the decision is often much more difficult.

You may have spent decades building up your savings, pension and other assets. Perhaps you’ve already experienced the financial consequences of a previous marriage ending. You might also have children from an earlier relationship whose inheritance you want to protect.

You want to provide for your current partner if you die, but you may be understandably reluctant to put your financial security at risk if the relationship breaks down.

Marriage can bring assets into consideration in a divorce settlement, including wealth acquired before the relationship began. That doesn’t mean everything is automatically divided equally. The outcome depends on the circumstances, including both parties’ financial needs.

Nevertheless, it’s a genuine dilemma. Staying unmarried may let you keep greater control of your assets during your lifetime, but it can leave your surviving partner facing a substantial Inheritance Tax bill.

How much Inheritance Tax could your unmarried partner face?

The problem could become more expensive from 6th April 2027, when most unused pension funds and pension death benefits will become subject to Inheritance Tax.

Imagine you die after that date, leaving your unmarried partner £200,000 in savings and investments and an unused pension worth £400,000.

Assuming your full £325,000 allowance is available, with no other relevant gifts, exemptions or reliefs, the calculation would be:

Before April 2027, the unused pension would ordinarily have fallen outside the estate for Inheritance Tax purposes.

Under the new rules, the same assets passing to a spouse or civil partner would normally be protected by the spouse exemption.

That’s a potential £110,000 difference, simply because you’re not married. The tax reduces the total amount available to your beneficiaries, even though the arrangements for paying it may vary.

Will the proposed changes to cohabitation law help?

The Government recognises that unmarried couples can face serious financial difficulties when relationships end, whether through separation or death.

In June 2026, it launched a consultation entitled A fairer end to relationships. The proposals include giving qualifying unmarried partners greater financial rights on separation and automatic inheritance rights if their partner dies without a valid Will.

However, the consultation closed in August and no changes have yet taken effect.

More importantly, the proposals don’t cover Inheritance Tax.

So even if unmarried couples gain stronger legal rights to inherit, they won’t automatically receive the tax advantages available to married couples and civil partners.

What can you do if you don’t want to marry?

Getting married or entering a civil partnership remains the most direct way to benefit from the spouse exemption. But these are major personal decisions, and Inheritance Tax shouldn’t be the only consideration.

If you intend to remain unmarried, it’s particularly important to make a Will and review how your assets and pension benefits would pass to your partner. A Will ensures that your wishes are recorded, but it doesn’t remove the Inheritance Tax liability.

Lifetime gifts may help reduce a future Inheritance Tax bill. Life insurance written in trust won’t reduce the tax itself, but it may provide money to pay it. Both options require careful planning and, where appropriate, specialist advice.

You should also consider getting legal advice about a cohabitation agreement, which can set out how your finances and assets would be dealt with if you separate. If you’re considering marriage but want to protect existing assets, a pre-nuptial agreement may be worth discussing with a solicitor. However, such agreements aren’t automatically binding in England and Wales.

Inheritance Tax planning advice from THP

There’s no simple answer to the dilemma facing unmarried couples. You may want to safeguard the assets you’ve worked hard to acquire while ensuring your partner is financially secure after your death.

The important thing is to understand the consequences of your decisions before it’s too late to make suitable arrangements.

At THP, we can help you understand your potential Inheritance Tax liabilities and explore ways to reduce them. We can also work alongside your solicitor and financial adviser to ensure your arrangements reflect your wishes.

Find out more about our Inheritance Tax planning services or contact us to discuss your circumstances.