Unmarried and Worried About Inheritance Tax? You’re Not Alone—Here’s What You Need to Know
Imagine this: you’ve built a life with your partner, raised children together, and shared everything—except a marriage certificate. Now, you’re staring down the barrel of inheritance tax, wondering how to protect your loved ones. It’s a scenario far too common for the growing number of cohabiting couples in Ireland, and it’s time to shed some light on this often-overlooked issue.
My partner and I have been together for 17 years, raising two children, and recently purchased a home together. While we’re committed to each other, we’ve chosen not to marry. As we plan for the future—including drafting a joint will—one question looms large: How can we ensure the surviving partner isn’t hit with a crippling tax bill?
And this is the part most people miss: Irish tax law, while evolving to recognize modern family structures, still leaves cohabiting couples at a significant disadvantage compared to married or civilly partnered couples. Let’s break it down.
The Assets in Question
We own two primary assets: a jointly owned house valued at €575,000 and a pension in my name worth €415,000. Our goal is simple: the surviving partner inherits the assets, and if we both pass simultaneously, our children inherit everything. But the tax implications are anything but straightforward.
The House: A Potential Tax-Free Haven?
Here’s where it gets controversial: I’ve heard there’s a clause allowing a surviving partner to inherit the family home tax-free if they’ve lived together for three years. But does the clock start when we began our relationship, or when we took out the joint mortgage in July 2025? The answer matters—a lot.
Under the dwelling house exemption, the surviving partner can indeed inherit the home tax-free if it’s the main family home, they’ve lived there for at least three years, and they don’t own another property. In our case, since we’ve only recently purchased the home, the three-year period likely begins when we moved in. But here’s the kicker: even if we own the house jointly, the exemption should still apply, as the legislation specifies the surviving partner cannot own another property—not the same one.
The Pension: A Tax Time Bomb?
Now, onto the pension. If I leave it to my partner, will they face a massive tax bill? Could a court intervene, considering our long-term dependency? Or should we leave it to our children, with my partner managing the funds?
This is where opinions diverge: While leaving the pension to our children is an option, it’s not ideal. Each child can inherit up to €400,000 tax-free, but if they try to pass it on to my partner, her tax-free allowance drops to just €40,000. Alternatively, my partner could apply to the courts under Section 194 of the Civil Partnership and Certain Rights and Obligations of Cohabitants Act 2010, which allows a surviving cohabitant to seek provision from the estate. The catch? It’s at the court’s discretion, and the process can be lengthy and uncertain.
The Bigger Picture: A Tax Law Out of Step with Reality
Here’s the harsh truth: As of the 2022 Census, over 175,000 couples in Ireland identified as cohabiting—nearly one in seven households. Yet, tax laws treat them as strangers, with a paltry €20,000 tax-free inheritance allowance. Compare that to married couples, who can inherit unlimited assets tax-free, and it’s clear: the system is outdated.
What Can We Do?
- Dwelling House Exemption: Ensure the surviving partner qualifies by meeting the three-year residency requirement and not owning another property.
- Pension Planning: Consider leaving the pension to our children, but be aware of the tax implications if they later gift it to my partner.
- Court Application: As a last resort, my partner could seek court intervention, though it’s not guaranteed.
But here’s the real question: In a society where cohabitation is increasingly the norm, isn’t it time for tax laws to catch up? While we navigate these complexities, it’s worth asking: Should love and commitment—not a marriage certificate—determine how we’re treated under the law?
What do you think? Should cohabiting couples have the same tax rights as married couples? Share your thoughts in the comments—let’s start a conversation that could shape the future of family law in Ireland.
For personalized advice, consult a legal or tax professional. This column is intended as general guidance, not a substitute for expert advice.
