Cohabiting couples – key legal issues around separation and succession

In Scotland, it is becoming increasingly common for couples to choose to live together either before, or instead of, getting married.

Recent statistics show that between 2001 and 2022 there has been an increase of 80.8% of cohabiting couples in Scotland. This means that it is increasingly important for couples to understand what your rights are and to understand what steps can be taken to protect yourself and your families.

It is important to understand the follow eight key points regarding cohabiting with your partner.

1. Cohabiting couples do not have the same rights as married couples in the event of separation

This is the case even if couples have lived together for decades; share children and intermingle their finances. The starting point in Scotland in the event of a separation is that assets and debts held in each person’s sole name are their sole responsibility and those in joint names are divided equally. This is the case unless there is an agreement regarding the division of these assets and liabilities.

2. Cohabiting couples can seek a capital sum payment from the other party following separation

The court in Scotland has the power to grant an order which requires one party to make payment of a capital sum to the other after they have separated. The court will only grant this order if it is satisfied that one party has sustained a financial advantage or disadvantage and the other party a corresponding advantage or disadvantage.

However, this claim must be raised with the court no less than one year after separation. If you separated more than one year ago then you lose the right to seek a capital sum in relation to an economic advantage or disadvantage sustained.

3. Cohabiting couples are not entitled to aliment; the transfer of property or a share of the other party’s pension

Unlike married couples, if a cohabiting couple separate their rights are very limited.

Firstly, they are not entitled to ask the court to order that their former party pays aliment. An order for aliment is an order which requires the economically stronger party to make regular payments, usually every month, to the economically weaker party to ensure they can maintain their standard of living immediately after a separation. If couples were not married, then the court cannot order one party to make alimentary payments to the other even if that party was entirely reliant on the other.

Secondly, they cannot ask the court to transfer a property held in joint names into their sole name.

Furthermore, they cannot ask for a share in the other party’s pension regardless of how long they have been together.

4. Cohabitation agreements can offer certainty; protect against potential court costs and ensure an equitable outcome for both parties

A cohabitation agreement is a contract which a couple can enter into either before they start living together or once they are living together. It can be flexible to the individuals involved and can cover only a particular asset (such as the family home) or it can detail how all assets and liabilities will be dealt with in the event of a separation. A cohabitation agreement can provide certainty to couples and can protect them against the cost of litigation in the event of a separation.

5. Cohabitants must act quickly to claim on Intestacy

If a cohabitant dies without a will, the surviving partner can apply to court under section 29 of the Family Law (Scotland) Act 2006. However, this must be done within six months of death — this is a strict deadline that will extend to 12 months once section 78 of Trusts and Succession (Scotland) Act 2024 comes into force. The process is discretionary, costly, and outcomes are uncertain.

6. Spouses and civil partners have stronger succession rights on intestacy

Cohabitants have no automatic succession rights in Scotland, and Section 29 claims are discretionary, time-sensitive, and costly. On intestacy, spouses and civil partners benefit from prior rights (including housing, household contents, and cash) and legal rights, being a share of the moveable estate (ie. all assets excluding land and buildings). Legal rights are available to claim even if the deceased left a will, giving spouses a level of protection that cohabitants do not enjoy.

7. Wills are crucial for cohabitants

Cohabitants are not entitled to claim under section 29 if their partner dies with a will. This means a surviving cohabitant could be left with nothing unless they are specifically provided for. Making a will is therefore essential so that cohabitants can set out clearly what portion of their estate is to pass to their partners, if any.

8. Inheritance tax exemptions are different for cohabitants compared to spouses

Transfers between spouses or civil partners, both during life and on death, are exempt from inheritance tax. This is not the case for cohabitants. If one partner dies leaving assets to the other, inheritance tax at 40% may apply on the value above the available nil rate band (currently £325,000). Additionally, any gifts made by the deceased in the seven years prior to death may reduce the available nil rate band, increasing the tax burden on the survivor.

Cohabitants can face significant inheritance tax exposure and with the upcoming legislative changes, it is important that cohabitants review circumstances including their wills, pension nominations, life insurance policies and powers of attorney.

It is important that cohabiting couples understand their rights. We recommend that cohabiting couples seek independent legal advice at the earliest possible stage to understand what steps they can take to protect themselves and their families in the future.