The question posed to an expert in this article is whether it is beneficial, from a tax perspective, to enter into a civil partnership before the end of 2024 rather than waiting until 2025. When two people get married or become civil partners, they are no longer subject to separate income taxes and instead form a single tax household. Normally, married couples or civil partners are subject to joint taxation starting from the 1st of January of the year of their partnership or marriage, regardless of the month of the event.
For individuals who get married on the 1st of January 2024 or the 31st of December 2024, they will be subject to joint taxation for the entire year 2024, with their income being declared in the spring of 2025. However, married couples or civil partners can also choose to have separate tax filings, in which case joint taxation would begin on the 1st of January of the following year (for income earned in 2025, declared in 2026, for partnerships or marriages in 2024).
One important consideration is the difference in income between the partners. Joint taxation does not always result in savings. When both partners have equal incomes, the total tax burden of two separate filings is the same as that of joint taxation. Typically, it is only when there is an income disparity between the partners that the person with the higher income will see savings. The larger the income gap, the greater the potential savings, as the benefits of the joint tax system, such as the ability to split income, are not capped.
In conclusion, the decision to enter into a civil partnership for tax purposes should take into account the potential advantages and disadvantages of joint taxation. While joint taxation can result in savings in certain circumstances, particularly when there is a significant income gap between partners, it is important to weigh these benefits against the potential drawbacks. Ultimately, the best course of action will depend on the specific financial circumstances of the individuals involved and their long-term financial goals. Consulting with a tax expert or financial advisor can help in making an informed decision.
