My partner and I have been together 17 years and have two children but are not married. We have recently purchased a house together and also want to make a joint will.

Ideally, we would just like it that the surviving partner would inherit the other partner’s assets and, if we both pass at the same time, the children would inherit our assets. I am just worried that because we are not married, the surviving partner would be left with a tax bill.

Our two main assets are the house which is jointly owned and valued at €575k and my pension in my name valued at €415k. We don’t own any other properties.

I believe there is a clause where if we are living together for three years if a partner was to pass away, the other partner could inherit the house without having to pay tax on it. If this is the case, would they take into account that we have been living together for a number of years previously or does it start from when we took out the joint mortgage (July 2025)?

In relation to the pension, if I left it to my partner, would there be a large tax bill due? If there was, could a court look at the situation and make an order based on dependency meaning they don’t need to pay tax? Or could you leave it to your children with your partner having control of the funds?

AH

Irish tax law has done much in recent years to recognise some elements of modern family / household structures but couples who choose not to marry remain one of the great unserved populations.

And that’s significant as an increasing number of people choose to live together and bring up families without formally getting married. At the time of the last Census in 2022, there were more than 175,000 couples identifying themselves as cohabiting in the State – that is close to one in seven households in Ireland.

The figure was up 17 per cent in just five years and, assuming that trend has continued, the number now will be above 200,000.

It is only last year, following a court challenge, that a surviving member of a cohabiting couple became entitled to claim the Bereaved Partner’s (Contributory) Pension. Until July 21st of last year, the payment was available only to widows, widowers and surviving civil partners – assuming, of course, that they met the PRSI criteria.

But they still lose out when it comes to tax.

Where a married couple or civil partners can choose to be taxed jointly, sharing tax credits to maximise their benefit, the same option is not available to cohabiting couples, who are treated as single taxpayers.

The same issues apply to inheritance. Where a spouse can inherit unlimited assets when their other half dies, a surviving partner in a cohabiting couple is treated as a stranger under the capital acquisitions tax (CAT) tax code, entitled to receive just €20,000 tax free – and even then only if that allowance has not been used with previous inheritances or substantial gifts from other “strangers”, i.e. people other than very close relatives.

The fact that you have been together for 17 years and have children is irrelevant. So you are quite correct to worry about the surviving partner being left with the risk of an unmanageable tax bill.

However, there are ways to mitigate the pain in your case.

First up is relief that is available under dwelling house exemption. This is that “clause” you refer to, allowing the surviving partner to inherit the home without having to pay tax on it.

In order to qualify, it must be the main family home of the person who dies, the surviving partner must have lived with that person for at least three years before their death and they must own no the property.

Two elements of your situation are interesting. First, the timing. You have only bought your home in the past year.

There is provision in the legislation where the dead person had moved homes, that the beneficiary must have lived with them for at least three of the past four years. However, if before the purchase last year, you were renting, there was nothing to inherit so I suspect the three years will count from when you started living in this property.

The other issue is that the recipient cannot own any other property. Again, my reading of the legislation means that the surviving partner would be OK as this is the same property, regardless of whether you own it as joint tenants (which means the surviving partner automatically gets the home on the death of the other) or as tenants in common (where each of you owns a half share and determines in your respective wills how it should be distributed).

The legislation states that the key thing is that the beneficiary “is not, at the date of the gift or at the date of the inheritance, beneficially entitled to any other dwelling-house or to any interest in any other dwelling-house” – the key word here being “other”.

Similarly, the Revenue’s CAT manual, which describes how they interpret the legislation in their operations says: “a successor does not have a beneficial interest in any other dwelling house at the date of the inheritance”. Again, the use of “other”.

As you are writing your wills, it would certainly make sense to take advice from your lawyer on that but it seems to me that the dwelling house exemption will apply.

That leaves us with your pension, which is substantial in itself and will certainly fall outside your partner’s tax free exemption – meaning that up to a third of it and any other assets left would go in tax.

Short of marrying – which many cohabiting couples do precisely to manage the inheritance tax situation – you do have capacity to leave each of your children assets of up to €400,000. The catch here is that it is they and not your partner who would benefit, and were they to try to give her the cash, her tax free benefit from them would be constrained to Category B – €40,000 lifetime exemption.

An alternative would be an application in the courts by the surviving partner under section 194 of the Civil Partnership and Certain Rights and Obligations of Cohabitants Act 2010. This provides for an application by a person for provision from the estate of a cohabitant.

It is at the discretion of the court to determine what if any provision should be made in favour of the surviving cohabitant and that would have regard to their own financial circumstances. Any application under section 194 needs to be made within six months of the grant of representation – the court order that allows someone to manage your estate.

The upside is that transfers to the surviving cohabitant under this section would not be subject to inheritance tax.

It is a bit of a palaver but it might be the hoop your partner has to jump through if they are to minimise their exposure to tax.

In a world where one in seven families is cohabiting rather than marrying, it does seem beyond time that tax law was updated to reflect the practical realities of society today – not that it will help you as you look to draft your wills now.

Please send your queries to Dominic Coyle, Q&A, The Irish Times, 24-28 Tara Street, Dublin 2, or by email to dominic.coyle@irishtimes.com with a contact phone number. This column is a reader service and is not intended to replace professional advice.