The Civil Partnership Act 2004 came into force on 5 December 2005 amid significant publicity, not to mention celebrity. Civil partnership provides a means of legal equalisation for same-sex couples, giving legal recognition to partners of the same sex, who want to enter into long-term interdependent relationships. The change in the law has implications for property transactions, as well as tax, inheritance and succession, pensions, social security and family law.
Although affecting residential property, the effects of the changes in the law will have an impact in a commercial sense, wherever there is a residential aspect, so that commercial lending, agricultural property, hotel or other leisure industry premises where there is a residential element, and other mixed use properties may come within the scope of the legislation. A "family home" under the Civil Partnership Act will have similar meaning to the more traditional "matrimonial home" under the Matrimonial Homes legislation, which has been in force for nearly twenty-five years. Consequently, civil partners who do not have title to the family home which they share with their partner, will have occupancy rights in the same way as non-entitled spouses under the Matrimonial Homes (Family Protection) (Scotland) Act 1981.
Accordingly the documentation required to be produced on the occasion of a sale or granting of security over the "matrimonial home" needs to be extended to include a "family home" under the Civil Partnership Act. Existing matrimonial homes affidavits should be expanded to include references to civil partners for use whenever affidavits are appropriate – usually where the seller or person granting the security is single. If there is a civil partner, with occupancy rights under the Act, it will be possible for that partner either to consent to the transaction, or to renounce their occupancy rights in the property, in either case by signing the appropriate document which then accompanies the application to register the relevant dealing at the Registers of Scotland.
The Keeper of the Registers of Scotland has indicated that he proposes to take a similar approach to "non-entitled" civil partners as he does for non-entitled spouses. A statement to the effect that there are no subsisting occupancy rights under the Civil Partnership Act will be inserted in the Land Certificate of a residential property provided appropriate evidence (i.e. affidavit, consent or renunciation etc) has been produced with the application for registration. If the transaction is in implement of a contract entered into before the Act came into force (i.e. prior to 5 December 2005) then the Keeper will accept confirmation in writing to that effect in the absence of any separate documentation. For sales by executors, it will be possible to produce to the Keeper a written assurance similar to that given at present under the Matrimonial Homes legislation, to the effect that there is more than one beneficiary entitled to the estate, where that is the case.
Stamp Duty and Stamp Duty Land Tax
On the same date, the Tax and Civil Partnership Regulations 2005 came into force. The regulations provide for equality in tax treatment between civil partners under the Civil Partnership Act and married couples. References to marriage and marriage-related terms in legislation will now incorporate references to civil partnership or civil partners, so that for example the stamp duty and SDLT reliefs for transfers in connection with divorce etc. will now include transfers between civil partners in connection with the dissolution of a civil partnership or the legal separation of the civil partners. Transfers to a party to a civil partnership (or to his nominee, or to trustees) on the formation of the civil partnership will also be exempt from duty.
For further information on the tax position, the Regulations are available from the HMRC website at http://www.hmrc.gov.uk/si/2005-3229.pdf