The Guardian

London, March 17:

UK lesbian and gay couples took another step towards full equality in Britain with provision in the UK budget announced yesterday to grant same-sex ‘civil partnerships’ the same tax advantages enjoyed by married couples. Crucially the planned changes to the tax rules will allow people to bequeath their assets to a same-sex partner without incurring inheritance tax. Transferring assets between same-sex partners will also fall outside the rules governing capital gains tax. The changes to the tax regime follow the passing last November of the Civil Partnership Act in the UK, which encountered some resistance in the House of Lords but will come into force on December 5 this year. While ministers denied that the act ushered in an era of gay marriage, it in effect gives same-sex couples the same rights as married people once they have registered as a civil partnership.

“This is very welcome news,” said a spokesman for gay rights campaigners Stonewall, “It gives same-sex couples the same tax breaks as married couples.” But Michael Caden, tax partner at BDO Stoy Hayward, warned that there are also some tax disadvantages that stem from registering as a civil partnership. Like married couples, civil partnerships in the UK can only have one exempt residence for the purposes of capital gains tax. In addition, the tax avoidance rules — many of which are concerned with offshore funds — that govern married couples will also apply to same-sex relationships. The rules will be changed.