Transfer tax allowance for some announced from April

The government has announced that from April 2015 married couples and civil partners may be eligible for a new Transferable Tax Allowance.

The Transferable Tax Allowance will enable spouses and civil partners to transfer a fixed amount of their personal allowance to their partner.

The option to transfer will be available to couples where one partner is a basic rate taxpayer (earning below £42,285 in 2015/16) and the other partner has unused personal allowances for the year. One individual will be able to transfer £1,000 of their personal allowance to their spouse or civil partner. It will mean that the higher earner will be able to earn £1,000 more before they start paying income tax.

The claim will be made online and entitlement will be from the 2015/16 tax year. Couples will be entitled to the full benefit in their first year of marriage.

For those couples where one partner does not use all of their personal allowance at the moment the tax saving will be up to £200.

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Stephen Charles is a tax partner at the firm, specialising in corporate and business taxation. For more details and advice, please contact Stephen on sac@hawsons.co.uk or 0114 266 7141.[/author_info]