Client Affairs

Civil Partnerships - The New Law

Meredith Thompson Mills & Reeve Matrimonial Solicitor 21 July 2005

Civil Partnerships - The New Law

On 5 December 2005, the Civil Partnerships Act 2004 will come into force, giving same-sex couples the right to have their relationships lega...

On 5 December 2005, the Civil Partnerships Act 2004 will come into force, giving same-sex couples the right to have their relationships legally recognised and regulated for the first time in the UK. If a couple gives notice on the first day that the legislation is operative, they will be able to register their partnership on 21 December 2005, becoming each other’s next of kin and enjoying most of the other rights and responsibilities which married people have in the process. After registration, the couple are “civil partners”. The Act also makes provision for same-sex couples whose partnerships have been registered in certain other jurisdictions to be recognised in the UK in the same way. Civil partners will find themselves within a very similar legal net to married couples. A partner who does not own the home in which both parties live will obtain the automatic right to live there. There are also fiscal advantages for civil partners, including recognition under the pension provisions equal to that afforded to a spouse. There will be access to the tax allowances from which married couples benefit including being able to make transfers of assets between partners on a no gain, no loss basis and the exemption from inheritance tax on the passing of a partner’s estate. There are disadvantages too: like married couples, partners in a civil partnership may only benefit from one exemption from CGT between them for their principal private residence. But what if it doesn’t work out? There is of course provision within the Civil Partnerships Act for a system of dissolution, which closely mirrors the divorce process for married couples. The sole ground for dissolution is, like divorce, “irretrievable breakdown” of the relationship. The breakdown of the relationship must be evidenced by 2 years’ separation (if both parties consent to a dissolution), 5 years’ separation, desertion, or unreasonable behaviour. Unlike divorce, there is no scope for dissolution by reason of adultery as the legal definition of adultery is tightly defined and confined to marriage. The courts will be able to deal with financial claims on the dissolution of a civil partnership in exactly the same way as they deal with claims by spouses on divorce: the full range of solutions (maintenance, lump sums, property transfer, pension sharing and variation of settlements) are available to the court, which must decide on the appropriate Order by considering the same checklist of factors. It is clearly envisaged that the case law which has been built up over the last thirty years in divorce cases and applications under Schedule 1 Children Act, and which informs interpretation of the matrimonial statutes, should be considered also in the law of civil partnerships. The court must give first consideration to the welfare of any child of the family under 18 years old when considering what order to make on dissolution. It must also consider each party’s income and financial resources, including any actual or potential earning capacity; financial needs and responsibilities; the standard of living the family enjoyed; the age of the parties and the duration of the civil partnership; any disabilities; contributions made or likely to be made; conduct if it would be inequitable to disregard it; and any potential loss of particular benefits to one party arising from the dissolution. As in divorce cases, the court will have a wide discretion when forming a view on the appropriate settlement. It is to be expected that on any given day, different judges will be making different judgement calls on similar sets of facts, which is unavoidable in an area of law where the personalities of the individuals involved and the specific histories of their relationships are key to determining a fair outcome. The interesting question is, with a blank slate before the courts as to the law on financial provision for dissolution of civil partnerships, how helpful will the case law of divorce be? Recent "big money" divorce case law has brought us to the expectation that where the marriage has been a long one – about 17 years or more – each party should be entitled to an equal share in the family wealth, no matter whether one party has not worked outside the home while the other has earned the family money. The immediate problem in connection with civil partnerships is that until 17 years has passed, it will be impossible for civil partners to have a "long" civil partnership. In the context of a legal system which has not previously provided any means to same-sex partners to formalise their relationship, it is to be hoped and expected that the courts will look at the length of the parties’ cohabitation before they became civil partners. In divorce cases, it has become common to amalgamate a period of pre-marital cohabitation with the length of the marriage in this way where the transition from cohabitation to marriage has been seamless, although anecdotal evidence suggests that there may be significant debate between the parties about the date of commencement of cohabitation and behaviour during the pre-marital period. Although same-sex couples with children are becoming more common, they are still in the minority. It is possible that proportionally more same-sex parents will seek to become civil partners because of the legal protection which the legislation offers, including enshrining the responsibility of both parties to maintain children of the family. However, the presence or absence of children in a relationship may make a significant difference to the financial provision awarded on dissolution of a civil partnership. In long marriage divorce cases, the contribution made by the financially weaker party to bringing up the family has often been cited as equal to the financial contribution made by the breadwinner, and it is likely that the court will follow this reasoning with civil partners. But what if there are no children? It is likely that the courts will have to come up with some creative solutions to these dilemmas. It is plain to see that despite the obvious parallels between divorce and dissolution of a civil partnership, there are still many uncertainties as to how the existing divorce law will be applied to civil partners. Civil partners may consider that a pre-registration agreement as to how their assets should be divided in the event of the dissolution of their partnership would be a sensible idea. Such an agreement should, subject to certain safeguards, be given significant weight in the event of a dispute, although it will be more precarious if the parties have children. The first dissolutions of civil partnerships will not be capable of commencement before 22 December 2006, as there is a one-year bar to dissolution after the civil partnership has been formed. It will therefore be some time before one is able to measure the accuracy of the predictions made now. However, for those about to enter into a civil partnership, it is never too early to consider how best to protect wealth in case the worst happens.

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