Know the rules on cohabitation
Loopholes exist where farm transfers may end in a court battle
Many parents are considering transferring the family farm to their farming sons or daughters before next December's Budget in order to avoid the possibility of reduced tax breaks on farm transfers. But the implications of the new laws regarding cohabitation are also making some parents nervous about their plans.
Cohabitation covers a vast array of different arrangements, from couples living together either prior to or as an alternative to marriage or couples where one or both may be separated or divorced and either unable or unwilling to enter into marriage.
But at what point do adults living under the same roof move from having a casual relationship in the eyes of the law to the point where they are officially cohabiting?
First of all, it must be an intimate or committed relationship of cohabitation between two adults for a period of at least five years. This reduces to just two years where they are parents of a dependent child.
The Civil Partnership Act enables an economically dependent party at the end of the relationship between a cohabiting couple to apply to court for maintenance; property or pension adjustment orders; and provision from the estate of a deceased cohabitant. However, cohabitants can opt out of the redress scheme by agreement of both parties.
While the Act only came into force at the beginning of this year, the time during which a couple cohabited before January 1 may be included for the purposes of calculating whether the two-year or five-year period of living together as a couple have been satisfied.
However, the Act only applies to relationships that have ended, whether by death or otherwise, after January 1. I have heard of a case recently where a woman, whose cohabitation relationship was over before January 1, was advised by her solicitor to stay within the relationship until the terms of the Act started, something which I would not personally condone myself regardless of the perception of injustice done.
There is a time limit for applicants to adhere to, which obliges cohabitants to apply for financial orders within two years of the end of the relationship. The two-year rule applies except in limited exceptions.