Make the grandest romantic gesture and reduce your tax bill
Getting married or conducting a civil partnership ceremony is often the happiest day of most people’s lives but unfortunately almost one million married or civil partnered couples in the UK have not used up to £900 in tax relief available to them.
The Marriage Allowance scheme currently allows couples to transfer up to £1,190 of their Personal Allowance to their partner, providing they earn more than the other individual.
Thanks to the tax relief that this offers, the one spouse could potentially reduce their annual tax bill by up to £238.
This allowance can be backdated to include any tax year since 5 April 2015, so it is not too late to act if you haven’t previously made use of the scheme.
To be eligible:
- You must be married or in a civil partnership
- Have the lower earning partner pay no income tax or generate an income below the personal allowance (currently £11,850, but rising to £12,500 in April 2019)
- Have the higher earner pay income tax at the basic rate
Alongside this generous relief, married or civil partnered couples are also entitled to pass ownership of assets between them free of Capital Gains Tax and Inheritance Tax (IHT) during their lifetime, as well as gain their spouse’s IHT nil-rate band allowance after they have passed away.
Of course, few marriages are entered into just for these benefits, but considering that few people take full advantage of the reliefs on offer it is worth seeking professional advice to see what liabilities could be reduced.
Link: Marriage Allowance