The Civil Partnership and Certain Rights & Obligations of Cohabitants Act 2010 (the "Act") came into effect from 1 January 2011. It makes fundamental changes in the law by introducing rights for civil partners (same sex couples, who can now register their relationship) and certain cohabitants.
The bulk of the Act concerns civil partnerships which are partnerships which can be registered under the Civil Registration Act, 2004 on application by two persons of the same sex.
Registration of Civil Partnership
A Civil Partnership can be registered on completion of certain formalities. Generally, the rules require:
- three months' notice to the Registrar;
- attendance at the office of the Registrar not less than five days before the date on which the Civil Partnership is to be registered to sign a declaration that there is no impediment to its registration; and
- completion of a Civil Partnership registration form in the presence of each of the proposed civil partners, the Registrar and two witnesses over 18 in a public place.
Recognition of foreign relationships
The Act contains provision for the recognition of foreign registered Civil Partnerships or similar classes of legal relationship.
Rights conferred on Civil Partners
After a Civil Partnership has been registered each of the partners acquires specified rights, including:
- The shared home in which the Civil Partners ordinarily reside will be subject to protection similar to that which applies in the case of married couples so that generally it is not possible for the partner who owns the home to dispose of it without the prior consent in writing of the other partner except in circumstances where a court dispenses with the other partner's consent.
- A court can on application make a maintenance order requiring one civil partner to provide maintenance to the other. Such orders can be enforced through, inter alia, attachment of earnings orders. Agreements purporting to exclude or limit the ability of a court to award maintenance are void.
- The Act confers succession rights on civil partners. The civil partner will have a legal right share to the deceased partner's estate similar to that of a surviving spouse. If the deceased leaves a civil partner and no children, the surviving civil partner's legal right is to 50% of the estate. If the deceased has left children then the surviving partner's share is to one-third of the estate. In case of intestacy if the deceased leaves a civil partner and no issue, the civil partner inherits the entire estate. If the intestate leaves a civil partner and issue then the civil partners takes two-thirds of the estate and the remaining one-third is distributed amongst the issue. Provision is included to permit a child of the deceased civil partner to make a court application within six months of the date of extraction of a grant of representation to the deceased's estate seeking an enlarged share.
Dissolution of civil partnership
A court can grant a decree dissolving a civil partnership where:
- at the date of institution of the proceedings, the partners have lived apart from one another for a period of at least two years during the previous three years; and
- provision that the court considers proper having regard to the circumstances exists or will be made for the civil partners.
The court is empowered to make a range of ancillary financial orders on granting a dissolution of a civil partnership, similar to those which may be granted on the separation of married couple, including:
- maintenance or lump sum payment orders;
- property adjustments orders;
- financial compensation orders (provision by way of insurance arrangement);
- pension adjustment orders;
- orders for sale of property or relating to occupation of property (such as the shared home); and
- orders providing for a surviving civil partner from the estate of a deceased former partner.
The Act also contains provision for a civil partnership to be annulled for specified reasons, including lack of capacity or consent, or if the prescribed formalities were not observed. Where a decree of nullity is granted, the civil partnership will be regarded as never having existed, so no ancillary financial orders may be claimed.
The Finance (No. 3) Act 2011 provides an exemption from tax on gifts and inheritances between civil partners, and allows for transfers of property between them without triggering any capital gains tax or stamp duty charge. It also amends the income tax code to provide for similar income tax treatment for civil partners as is applicable to married couples. These tax rules apply for the tax year 2011 and subsequent years.
The Act also provides for the rights and obligations of cohabitants. A cohabitant is defined in the Act as one of two adults (whether of the same or opposite sex) who live together as a couple in an intimate and committed relationship; who are not related to each other within certain prohibited degrees of relationship and who are not married to each other or civil partners of each other.
A cohabitant is only entitled to seek financial orders under the Act if that person is a Qualified Cohabitant. A Qualified Cohabitant is an adult who was in a relationship of cohabitation with another adult and who, immediately before the time that that relationship ended, whether through death or otherwise, was living with the other adult as a couple for a period:
- of two years or more, in the case where they are the parents of one or more dependent children; and
- of five years or more in any other case.
A person who would otherwise be a Qualified Cohabitant does not qualify if one or both of the parties was married to someone else and at the time the cohabitation relationship concerned ends each adult who was married had not lived apart from his or her spouse for periods of at least four years during the previous five years.
Reliefs available to Qualified Cohabitants
An individual who is a Qualified Cohabitant can apply to court for a range of orders similar to, although not quite as extensive as, those available to a married couple who separate or divorce. The court can make an award if the Qualified Cohabitant satisfies the court that:
- he/she is financially dependent on the other cohabitant;
- that the financial dependence arises from the relationship or the ending of the relationship and
- that it is just and equitable in all the circumstances to make an order.
The range of potential reliefs available include:
- maintenance payments and lump sum payment orders;
- pension adjustment orders whereby the entitlement of one of the cohabitants to a pension benefit may be designated and paid to for the benefit of the other; and
- property adjustment orders (ie the transfer or settlement of property on one cohabitant by the other);
- provision after a cohabitant's death out of the deceased's estate for the surviving cohabitant. In contrast to the position of civil partners, the Act does not confer any automatic entitlement on a Qualified Cohabitant to any share of a deceased cohabitant's estate.
Applications seeking financial relief must "save in exceptional circumstances" be instituted within two years from the time that the relationship between the cohabitants ended. In the case of an application for provision out of the estate of a deceased cohabitant, the application must be made within six months of the date on which a grant of representation is extracted to the deceased person's estate.
The Finance (No. 3) Act 2011 provides that an individual who pays maintenance to a Qualified Cohabitant pursuant to a court order qualifies for a tax deduction on that payment, while the Qualified Cohabitant who receives the payment must account for any income tax on it. It also provides an exemption from tax (including capital acquisitions tax; capital gains tax and stamp duty) on the transfer of property to a Qualified Cohabitant pursuant to a court order. In all other respects, cohabitants are subject to tax under ordinary rules as if they were strangers on any transactions entered into between them. These tax rules apply for the tax year 2011 and subsequent years.
The Act provides that cohabitants may enter into a cohabitants agreement to provide for financial matters during the relationship of the parties or when their relationship ends, whether through death or otherwise.
The Act stipulates that such an agreement is only valid if:
- each of the parties has obtained independent legal advice before entering into it, or the parties have received legal advice together and have waived in writing the right to independent legal advice;
- the agreement is in writing and signed by both parties; and
- the general law of contract is complied with.
Such a cohabitants' agreement may expressly provide that neither of the parties may apply for maintenance orders, pension adjustment orders or property adjustment orders from the other. The Act provides that a court may vary a cohabitants' agreement for the benefit of either of the
parties or of a dependent child but only "in exceptional circumstances, where its enforceability would cause serious injustice".
As set out above, certain rights can accrue automatically to a person who becomes a Qualified Cohabitant under the Act even if the parties have not taken steps to register their relationship, as civil partners must do if they are to become entitled to rights under the provisions of the Act dealing with civil partnership. To avoid any rights accruing it would be necessary for the parties to opt out of the provisions by executing a cohabitants' agreement stipulating their agreement on financial matters.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.