- Written by Holly Masters
This week the government has opened registration for the new Marriage Allowance, a tax break for married couples helping them to save up to £212 in tax per year.
A mere week after Valentines Day and David Cameron has released this policy based on the ‘valuing commitment’ of marriage to society. Perhaps this has encouraged men and women around the UK to propose based on the prospect of a potential tax break?
From April 2015, the allowance means that a spouse or civil partner who doesn’t pay tax - therefore not earning at all or is earning below the basic rate threshold (£10,600) – can transfer up to £1,060 of their personal tax free allowance to a spouse or civil partner, as long as the recipient of the of the transfer doesn’t pay more than the basic rate of income tax.
Therefore this is not relevant for those who are married/in a civil partnership with higher rate tax payers, as they will not be applicable.
What to do next
One person in a couple will apply online (you can register your interest at https://www.gov.uk/marriage-allowance) and will apply to transfer their allowance to their spouse or civil partner, and HMRC will tell the recipient about the change to their Pay As You Earn (PAYE) tax code.
From April, HMRC will contact those who have already registered for the Marriage Allowance to apply. People can register at any point in the tax year and still receive the full benefit of the allowance.
For more information on this new allowance, or to query whether this is beneficial for your circumstances, please feel free to contact the team at Spirare.