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Autumn Statement: £1k tax transfer introduced for married couples
by Elsa Buchanan on Dec 05, 2013 at 12:12
The government has confirmed that individuals can transfer up to £1,000 of their personal tax allowance between married couples and civil partners from 2015.
From April spouses who do not work will be able to transfer £1,000 of their personal tax allowance to their husband or wife or civil partner, assuming neither is a higher-rate taxpayer and one is earning less than the personal allowance.
Four million families will benefit, Osborne said.
The measure could make four million couples who are eligible basic rate taxpayers up to £200 better off annually, but will be completely withdrawn at higher-rate taxpayers, making some couples worse off after a pay rise, for example.
The tax break will cost the government up to £0.7 billion per year.
The proposals were announced by Downing Street ahead of the Conservative party conference in September.In his Autumn Statement, chancellor George Osborne said: 'The new transferable tax enables people to transfer £1,000 [of their personal tax allowance] to their wife, husband or civil partner. This is just the start.'
To benefit from this one person must earn under the personal allowance, currently at £9,440 but rising to £10,000 in April 2014, and the other must not earn more than the basic rate threshold.
Osborne also announced the transferable tax allowance will increase in line with the personal tax allowances.
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