How would you like an extra £250 each year.
There are various tax allowances that can be claimed, in this edition I want to highlight the Marriage & Married couple’s allowance.
I quite often encounter married couples who have different levels of tax due to their earnings.
Let’s start with the level of tax someone would need to pay
Income £0 – £12500 no income tax due
£12,500 – £50,000 income tax due at 20%
£50,000 – £150,000 income tax due at 40%
£150,000 + income tax due at 45%
If, as a married couple (assuming you married from 2005, different rates apply for prior to 2005) one of the married couples is a nil rate tax payer and the other is a basic rate tax payer. In order to reduce your tax bill on the couple who is a basic rate tax payer you have the option to be able to in short use a maximum of £1250 of the nil rate tax payer’s allowance.
Please note you must have some of the allowance to be able to share in the first instance e.g. if your income is less than £11,250 you can share the full £1250 to your basic rate tax payer. By transferring over the £1250 to the basic rate tax payer their personal allowance is increased to £13,750. This will provide you (as a couple) with an extra £250 for the current tax year.
What makes this more interesting is that you can backdate a claim for up to four years meaning, you could be due a tax rebate of up £1150.00. If you want to discuss this further please get in contact on 01483 654135 / 01252 210135