A new transferable tax allowance for married couples has been announced by the Prime Minister at the annual Conservative party conference in Manchester.
The allowance comes into effect from April 2015 and will permit one spouse to transfer part of their personal allowance to another. The new tax break will be subject to certain conditions as follows:
- For couples choosing to use transferable tax allowance, one individual will be able to transfer up to £1,000 of their income tax personal allowance to the other.
- The option will be available to married couples, same sex married couples and civil partners.
- It will only be available where one spouse or partner is a basic rate taxpayer and one has unused personal allowance. It will not be available to higher rate taxpayers.
- Couples will be entitled to the full benefit in their first year of marriage.
- Those older people who are entitled to the married couple’s allowance will not be eligible for the new transferable allowance option.
- Claims will be made online.
- You are able to ‘opt-out’ of the allowance even if you have already opted in.
Mr Cameron said “In effect, if you pay the basic rate of tax and your partner doesn’t use all of their personal allowance, you’ll be able to have some of it. Most couples who benefit will be £200 a year better off as a result.”
We will keep you up to date as and when further information is released.
If you would like to discuss this new tax break in further detail please don’t hesitate to contact Julie Walsh at Julie.email@example.com or on 01254 679131.