Weekend Essay: Taking Job Only if IHT Is Paid

Since Chancellor Rachel Reeves announced one of the biggest reforms in a generation back in 2024, the Inheritance Tax (IHT) free allowance has rarely been out of the news. The change, which brings unused defined contribution pension pots into the scope of IHT from April 2027, has forced financial advisers and their clients to rethink retirement planning. The debate has been reignited recently after comedian Ricky Gervais told the national press he was considering marrying his long-term partner Jane Fallon to avoid a hefty tax bill. Gervais, who is estimated to have a net worth of around £140m, said that while he and Fallon have been sharing money and living together for 40 years, they would likely get married specifically to avoid paying tax. “That would be the reason I marry,” he stated. “We haven’t done it yet. But if it wasn’t for [tax], why?”

Pressure to wed

Gervais added that some marriages do not last a year, pointing out the difference between his long-term relationship and a standard marriage. The pressure to marry for tax reasons highlights a strange dynamic in modern relationships. While some couples see marriage as a step to take, others view it as a burden. The comedian’s partner, Jane Fallon, has a net worth of approximately £1.3m. For a couple in their position, the tax bill on Gervais’ estate would be significant. The current IHT threshold stands at £325,000, and anything above that is taxed at 40%. Even with the tax applied, Fallon would likely still have more than enough to live on. This financial incentive creates a dilemma for high-net-worth couples who may not otherwise consider tying the knot.

My mother has been with my stepfather for 25 years and they have never married, nor do they show any sign of changing that. They have both been married before and neither of those relationships worked out. They are now renting and do not own their own homes, which removes the pressure to marry for financial reasons. For them, the choice not to marry is a conscious one that has worked well. In contrast, Gervais and Fallon have a combined wealth that likely exceeds £10m, particularly given their property in Hampstead. This disparity shows that the choice to marry or not is often dictated by financial reality. When assets are low, the tax incentive disappears. When assets are high, the incentive becomes overwhelming.

Who has to pay?

The average UK house price is £375,000, meaning that any couple who owns their home outright could be liable to some kind of IHT. This suggests that the wealthy are not the only ones facing these choices. Even mass-affluent couples with assets above the £325,000 threshold are forced to consider the implications of marriage for tax purposes. My own fiancée and I recently debated this issue. We have chosen to marry despite not yet owning a property. Her argument was that anyone with that much money should pay their fair share of tax. She believes that £325,000, plus the 60% tax on any amount above it, would be enough for her to live on. She would rather that money went towards paying for vital public services like the NHS.

I argued that I would prefer my surviving spouse to have more than she needs than to help people I do not know. I would rather she had enough to cover unplanned costs and life’s unexpected emergencies without having to work. We eventually concluded that raising the threshold to £1m might be the answer, but the Treasury is unlikely to agree. Last year, the government collected £8bn in IHT receipts alone. Despite the tax only bringing in 1% of total revenue, it is not going to compromise on such a money-spinner. This financial reality makes the decision to marry a practical one for some. In Gervais’ situation, for me it is a resounding yes. I don’t agree with having to, but I would in a heartbeat to make sure my partner was financially secure for life. It’s just a bit sad it has come to this.