How you might benefit

There are principally four criteria to consider:

  • Are you married or in a civil partnership?
  • Does one of the two of you have income of £10,600 or less (and this can include an additional £5,000 of savings interest)?
  • Is the other a basic rate tax-payer (broadly speaking income of between £10,601 and £42,385)?
  • Were you both born after 6 April 1935? (those born before get a more generous allowance already)

If the answer to all of the above four questions is yes then the spouse (or civil partner) which has the unused personal allowance can transfer £1,060 (and no more) to the other. As this means 20% less income tax is paid on the £1,060, the potential saving could be £212.

If the lower earning spouse (or civil partner) has less than £1,060 available they must still transfer the full £1,060. This means they will end up paying basic rate tax – still of benefit but a classic unnecessary over-complication!

Claiming

You can register online here. Apparently HMRC are issuing notification in batches. Usually you will receive a tax code amendment, but it can take up to 14 weeks.

 

Opinions & Insights

Follow us

Stay in touch with our latest news and views

    Register for updates

    We issue regular updates which cover current financial planning topics. Please enter your email address if you would like to receive these. Please note that you may withdraw your consent to receive our updates at any time by notifying us at main business address.
     Thank you, you have been added to the mailing list, and will receive our next quarterly update.
     Please fill out the missing fields