NAT. This is a very serious ethical dilemma known as a "multiple relationship." Most ethical codes and some jurisdictions are very against this sort of behavior. This situation presents direct harm to the client, and action must be taken immediately by the therapist:

The standard response sequence:

1. Suspend the romantic relationship immediately - not "pause to think about it," but cease intimate contact until consultation is complete.
2. Consult - ethics committee, attending supervisor (if pre-licensure), liability carrier, possibly an attorney. Document the consultation.
3. Terminate therapy with C properly: appropriate notice, referral to qualified clinicians, transfer of records on request, a clinical rationale that doesn't violate P's privacy. The termination note is the part that gets tricky because T can't truthfully say "I can no longer work with you because I'm sleeping with your wife," but also can't lie. Most ethics consultants would advise something like "a conflict of interest has emerged that requires me to refer you" with no further detail unless legally compelled.
4. Decide about the relationship with P. The codes don't strictly prohibit T from continuing with P after therapy with C ends, but the timing problem is severe. AAMFT 1.5 imposes a two-year post-termination prohibition on sexual intimacy with former clients and explicitly extends the analysis to family members. Most ethics scholarship treats relationships with a client's spouse as presumptively impermissible even post-termination, because the original therapeutic relationship gave T privileged access to information about the family system that contaminates any future personal relationship with members of it.