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Set to be introduced from 6th April 2015, a new tax allowance sees eligible couples invited to register online. However, the tax break has been widely criticised as millions won’t be eligible to apply.

Any couple where one spouse or civil partner is a higher rate taxpayer earning £42,386 or more a year will be ineligible for the break, even if the remaining spouse or civil partner has unused tax allowances. According to the government, the aim of the measure is to initiate “recognition of marriage into our tax system”. The government also stated that the tax allowance would help over four million customers who are married and around 15,000 civil partnerships, who will all save around £212 a year. Criticism has been received, however, as the tax break isn’t being given to all couples and civil partners.

What is the tax allowance?

Under the new rules, a spouse or civil partner can transfer unused tax allowances, up to £1,060 a year, to their partner. This will mean their partner can earn an extra £1,060 a year tax free, providing the couple with an extra £212 income a year.

Who will miss out on the allowance?

If a spouse or civil partner has income exceeding £42,385 a year, they will not be able to maximise the benefits of the transferred allowances. As only unused allowances can be transferred to a spouse or partner, if a person will have income above £10,000 from April 2015, they won’t be able to transfer the full amount of £1,060. People who live together but aren’t married or in a civil partnership won’t be eligible to receive the tax break, even if they have cohabited for many years.

How do you apply for the scheme?

If you believe you are eligible and would like to transfer unused allowances to a spouse or civil partner, register online at In April, those people who have registered will be contacted by HMRC and asked to apply for the tax break.

Married Couple’s Allowance

Currently, if one person from a married couple or civil partnership was born before 6th April 1935, they are entitled to claim Married Couple’s Allowance. This allowance could reduce the amount of tax paid by up to £816.50 a year, depending on income.

For more information on tax allowances and relief, get in touch with the team here at The Accountancy Partnership.

About The Author

Karl Bilby

We work very closely with our expert accountants to bring you the latest factually correct tax and accounting news. We also enjoy writing about small business news that we hope you find useful!

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