Are you a single person annoyed at the thought that your family will have to give the government 40% of your estate when you die? Read on for a loophole to avoid it...

The Civil Partnership Bill took effect late last year; at no point does the Bill specify that the partnership has to be anymore than just that, civil! Although billed by the media as a ‘gay marriage’, there is no stipulation that you have to be so inclined. The closest relation allowed to form a partnership, as with a marriage, is a cousin. This would mean that family money could be protected by entering into a civil partnership by making an agreement with a friend or cousin of the same sex to avoid having to pay inheritance tax.

There would, of course have to be a huge element of trust between the two families, but the concept has to be worth exploring especially in the case of two friends or relations (but not brothers or sisters!) that already share a house that potentially could be at risk if one of them died.

All you need to form a Civil Partnership with someone of the same sex is:

1To declare that you are free to form the relationship (ie you are unmarried, widowed or divorced)

2To give 15 days notice of the intent

3To sign the documents in the presence of two witnesses

4To pay the fees (they vary between authorities but you shouldn’t have to pay more than £100 each)

5You do not have to be living together, just show some proof of address for each of you.

6You do not have to have a formal ceremony.

A Civil Partnership can be dissolved in the same way as a divorce but the earliest is one year after making the agreement.

As with a marriage, there is no inheritance tax between civil partners and your nil rate band tax exemption could be used for each estate.

Just think, this could be start of a beautiful friendship with huge savings for your families and the great advantage of not having to leave your home if your friend dies before you. There are very few ways of beating Mr Brown, this could be just the one!

Please take advice from your own legal adviser before proposing?!

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