Posted by admin - November 3, 2014 1:55 pm
Transfer of Personal Tax Allowance
From 6 April 2015 a spouse or civil partner who is not liable to income tax because their income is below their personal allowance or who is liable to income tax at the basic rate, dividend ordinary rate or the starting rate for savings, will be able to elect to transfer £1,050 of their personal allowance to their spouse or civil partner.
There will be a corresponding reduction to the transferring spouse’s personal allowance. A spouse or civil partner who is liable to tax at the basic rate, dividend ordinary rate or at the starting rate for savings will receive the transferred personal allowance and obtain a reduction in their income tax liability at the basic rate of tax.
Who is eligible to transfer personal allowance?
- Couples can only transfer unused personal allowances to their spouse or civil partner if neither party is classed as a higher or additional rate taxpayer.
- Married couples already claiming the Married Couple’s Allowance (MCA), affecting only those married couples where at least one of the spouses/civil partners was born before 6 April 1935, will also not be able to make a transfer.
- Non-UK domiciled individuals who have elected to pay tax on the remittance basis of taxation or non-UK residents who would be higher or additional rate taxpayers if their worldwide income was within the scope of UK tax, are also unable to transfer their personal allowances.
For more advice on your making the most of your personal tax allowances, or for help completing your Self Assessment tax return please contact your local MFW office.
To download a copy of HMRC’s transferable tax allowances for married couples and civil partners pdf click here.
