Cohabiting couples should be entitled to significant tax breaks on property that they inherit from their partners, the Law Reform Commission has recommended in a new report to be published today, writes Liam Reid.
In a series of proposals aimed at providing greatly improved rights for couples living together in long-term relationships, the commission also recommends that they should also be entitled to access to the courts in certain cases to arbitrate on property and maintenance issues if the relationship ends.
Its consultation paper on the rights and duties of cohabitees includes eight separate recommendations aimed at improving rights to inheritance, social welfare and healthcare.
The commission stops short, however, of recommending the establishment of official State recognition of cohabiting status through the establishment of a partnership registration scheme. Married couples would still be entitled to greater rights, which are enshrined in Article 41 of the Constitution.
The measures should also apply to same-sex couples, a group to which the Law Reform Commission believes its proposals will be of particular benefit, as the State does not currently recognise same sex relationships.
Couples should be entitled to the various rights or become "qualified cohabitees" once they have been living together continuously for three years or more. If a couple have a child together, the rights should take effect after two years.
Of most significant financial relevance is the recommendation that the relationship of qualified cohabitees should be recognised by the tax code.
According to Mr Raymond Byrne, director of research at the Law Reform Commission, the surviving member of a cohabiting couple currently has to pay the full rate of inheritance tax on the family home on the death of a partner, while the marital home is exempt from death duties for married couples. Under the commission's proposals for a significant tax allowance, cohabiting couples would face "little or no death duties on a modest family home".
The commission has also recommended that couples whose relationship has ended should be given the right to apply to court for "certain rights and financial reliefs". Specifically, couples who have both contributed to mortgage payments on a home would be able to go to court for a "property adjustment".
Individuals will also be able to apply for maintenance orders "in exceptional circumstances", for example if they gave up work to become a home maker.
The consultation paper does not discuss the establishment of a State register for cohabiting couples, as proposed recently by the British government, because it raised "complex policy matters which merit separate discussion".