Married couples and civil partners can now register onlinefor a new tax allowance. The marriage allowance permits a spouse of civilpartner who does not pay income tax to transfer up to £1060 of personal taxfree allowance to their partner. However, only households on lower incomesstand to benefit. If the partner is a higher rate tax payer, someone earningmore than £42,386 then the couple will be excluded from this tax break.
Andrew Keates accountants can confirm that this scheme iscentred around the introduction of the recognition of marriage into the UK taxsystem. The allowance will be available from April but couples can registernow. The allowance is set to benefit more than 4 million married couples and15,000 civil partners, who will save up to £212 a year.
The tax break scheme works due to all workers having apersonal allowance for tax. This is the amount of money that an individual canearn in a year before they must pay tax. Currently this amount of £10,000 butin April will rise to £1,060. From April, married couples (or civil partners)where one person earns less than the personal allowance will be allowed totransfer up to £1,060 of their unused allowance to their partner thus reducingtheir tax bill. The receiving partner must be a basic rate taxpayer and earningno more than £42,385.
The limit of £1,060 will increase automatically in line withthe personal allowance.
Married couples and civil partners where one person earnsover the basic rate threshold are exempt regardless of what the other partnerearns. Couples where the lowest earner brings in more than the personalallowance will also miss out, due to only unused allowances being transferred.Couples who are cohabiting but not married or in a civil partnership will alsobe excluded.