More than four million married couples and 15,000 civil partners may be able to benefit from a new tax saving*…
With effect from 6th April 2015, there has been some new allowances introduced which could see couples make a welcomed tax saving. If you earn less than the £10,600 income tax personal allowance (for the 2015-16 tax year) you may be able to reduce your husband, wife or civil partner’s tax by up to £212 by transferring up to £1,060 of your unused personal allowance to them.
This can be done providing the recipient of the transfer isn’t a higher rate (40%) or additional rate (45%) tax payer. This transfer opportunity is also available to those who are self-employed providing the criteria is met.
So what’s the catch?
There is none. As long as all of the following applies, you are able to claim Marriage Allowance:
- you’re married or in a civil partnership
- your annual income is £10,600 or less
- your partner’s annual income is between £10,601 and £42,385 (2015-16 tax year)
- you were born on or after 6 April 1935 (see below if you were born before this date)
How do I claim it?
If eligible, one person within the couple can register to transfer their unused allowance to their spouse or civil partner online. This is done via the Marriage Allowance site. You are able to register at any point within the tax year and will still receive the full benefit of the allowance.
Those who register will then be contacted by HM Revenue and Customs (HMRC) to ask whether they want to apply. Once in place, HMRC will notify the recipient of the change to their Pay As You Earn (PAYE) tax code.
What if I was born before 6th April 1935?
Then there is some good news for you too! If you live with your spouse/civil partner and one of you was born before 6 April 1935, you can claim for Married Couple's Allowance. This could reduce your tax bill by between £314 to £816.50 for the 2015-16 tax year.
This is just one tax saving opportunity. If you would like us to give your financial situation a review, please feel free to contact us.
*source: moneysavingexpert.com 20.02.15