July 20. 2018
Marriage brings many financial perks, one of which is the
potential transfer of some of your Personal Allowances. For 2018/19 the
Marriage Allowance lets you transfer £1,190 of your Personal Allowance to your
spouse/civil partner. The person transferring it must earn less than their Personal Allowance, currently £11,850,
although to be truly tax efficient they should earn less than £10,660, to make
sure they don’t get a tax bill. While the personal receiving it cannot be a
Higher Rate Taxpayer.
To benefit from Marriage Allowance the following must apply:
·
you’re
married or in a civil partnership,
·
the
transferor does not pay income tax or your income is below your Personal
Allowance,
·
the
transferee’s only income is taxed at the basic rate, which in
2018/19 means taxable income of no more than £46,350.
When used correctly the transfer can help save Income Tax at
20% on the amount transferred, which in 2018/19 is £238. It may not seem like a
lot but if this can keep you below the cap for Payments on Account this can
really help with your cash flow.
Feel free to contact us if you would like further advice and
guidance on this.