It’s Tuesday! And Valentines Day! Let’s talk Tax for you and your partner.
Read this week’s short tax snippet for Doctors & Dentists, to help you save money and get more organised with your tax affairs. It’s just to give you a flavour – take 5 minutes to have a read.
This article does not constitute advice. Professional advice should be taken prior to acting on any part of it.
The Financial Conduct Authority does not regulate tax advice.
Tax breaks for couples
Sharing your personal allowance
If you are married or in a civil partnership, and earn less than the income tax personal allowance, currently £10,600, then it may be possible to transfer up to 10% of your allowance to the higher earner.
This tax break can save up to £212 per year in tax.
It is only applicable though if the higher earner pays tax at basic rate. Once they go into higher rate tax, payable at 40%, or top rate tax, payable at 45%, then this tax benefit is not available.
However, it remains a good way for couples to combine their resources and ultimately save tax.
To receive the tax benefit, either you or your spouse or civil partner, need to apply online to transfer the 10%. An amendment will then be made to the PAYE tax code of the recipient, as applicable.
This allowance is only available for people born after 1935.
Anyone born before that date can claim the Married Couples Allowance, which offers more tax relief – between £314 and £816 in the 15/16 tax year.
There are more opportunities for couples to save tax, particularly when one partner doesn’t work, or has a low income under the personal allowance threshold. Speak to a specialist accountant and a financial adviser to find out more details.
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