It is now possible to transfer 10% of your personal allowance to your spouse or civil partner (£1,185 during the 2018/19 tax year).
Only basic-rate taxpayers can benefit from this tax break, so the potential tax saving is £237 (£1,185 x 20%).
Unmarried couples are excluded – this was David Cameron’s rather feeble attempt to use the tax system to reward marriage.
Married couples can generally only benefit from this tax break if:
- One person earns less than £11,850 (not including savings interest under £5,000) and is therefore wasting some of their personal allowance
- The other person is a basic-rate taxpayer (i.e. earns less than £46,350)
- Both individuals must have been born on or after 6 April 1935.
You have to register to use it:
Is it for you?
Potential winners are married couples where one person does not work (e.g. full-time parents) or only has a part-time job.