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Q&A: Marriage Tax Breaks

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David Cameron has unveiled a new tax allowance for married couples. We breakdown what it will mean and who it will affect...

What is the Marriage Transferable Tax Allowance?

The Marriage Transferable Tax Allowance is a tax break which has been announced by prime minister David Cameron.

Married couples and civil partners will be eligible for the tax break from April 2015.

How does it work?

It will enable spouses and civil partners to transfer £1,000 of their personal tax allowance to their partner. This will mean that the higher earner will be able to earn £1,000 more before they start paying income tax.

The scheme will be worth up to £200 a year for four million couples, including the 15,000 in civil partnerships.

Do all couples qualify for the tax break?

No, the transfer option will only be available to couples where neither partner is a higher rate taxpayer.

The policy benefits married couples, including same sex married couples and civil partners where one is a basic rate taxpayer (earns below £42,285 in 2015 to 2016) and one has unused personal allowance.

Three sorts of couples in a marriage or civil partnership will not be eligible for the tax cut:

  • Couples whose members both have incomes above the personal allowance.
  • Couples containing a higher-rate (40%) or additional-rate (45%) income tax payer.
  • Couples whose members both have incomes below the personal allowance: they would pay no income tax in the absence of the policy, so cannot benefit from any income tax cut.

How will couples be able to apply?

Couples will be able to apply online and will receive the benefit for the 2015- 2016 tax year. Couples will be entitled to the full benefit in their first year of marriage by summer 2016.


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