The Government has confirmed that more than four million married couples and civil partners will be entitled to a new transferable tax allowance. Under the new scheme, eligible spouses and civil partners will be able to transfer £1,000 of their personal income tax allowance to their partner.
Due to come into effect between 2015 and 2016, the new measure will allow the higher earning partner to earn an additional £1,000 before paying income tax, meaning a potential saving of up to £200 a year.
To qualify for the tax break:
- You must be in a marriage or civil partnership.
- One partner needs to be a basic rate taxpayer (earning below £42’285 in 2015 to 2016).
- One partner needs to have a portion of their personal allowance unused, which currently stands at £9,440 for people born after 5th April 1948, £10,500 for people born between 6 April 1938 and 5 April 1948 and £10,660 if you were born before 6th April 1938.
The new tax break will not be available to the following:
- If either one or both individuals are a higher rate taxpayer.
- Any older people who are currently entitled to the married couple’s allowance will not be eligible for the transferable tax allowance option.
Couples will be eligible from the first year of marriage and claims for the allowance will be made online. The aim of the allowance is to help couples where one partner has not used all of their personal allowance, or does not work at all.
The finer details of the new £1000 tax break for married couples are yet to be revealed. We look forward to sharing further details with you once they have been announced.