Love and marriage
Happy Valentine’s Day! We hope you enjoy as romantic a day as you can in the midst of lockdown number three. If you’re not already married, then 14 February might make you think about popping the question. The good news is, if you do, then you could be on your way to saving some tax (we’re old romantics here at Lewis & Co!).
That said, getting married doesn’t bring the tax incentives which is used to, as people are generally taxed individually nowadays. It used to be though that getting married brought a raft of tax incentives, with husband and wife being viewed as one single taxable entity.
Marriage Allowance
In April 2015, the Government introduced the Marriage Allowance and this allows you to transfer £1,250 of your Personal Allowance to your husband, wife or civil partner, which can reduce your tax by up to £250 in the tax year.
You can benefit from Marriage Allowance if all the following apply:
• you’re married or in a civil partnership
• you do not pay Income Tax or your income is below your Personal Allowance (usually £12,500)
• your partner pays Income Tax at the basic rate, which usually means their income is between £12,501 and £50,000 before they receive Marriage Allowance
You cannot claim Marriage Allowance if you’re living together but you’re not married or in a civil partnership.
If you or your partner were born before 6 April 1935, you might benefit more as a couple by applying for Married Couple’s Allowance instead.
Tax free gifts
Another benefit of getting married with regard to tax is that any gifting between you and your spouse in your lifetime is tax-free. You can also leave any possessions and property to your partner tax-free after you die.
Your Capital Gains Tax exemption is also effectively doubled, and you and your spouse can transfer assets between each other tax-free during your lifetime.
Savings
Getting married can mean that you get to take advantage of less tax on your savings interest if one of you is in a different tax bracket to the other.
You will need to let HMRC know if your personal circumstances change: Tell HMRC about a change to your personal details: Relationship or family changes – GOV.UK (www.gov.uk)
We would be happy to discuss your requirements. Whether you’re an individual, self-employed or a limited company, we can tailor a plan to help you reduce your tax liabilities now and for the year ahead. Please call our team on: 01892 513515 or email: info@lewisandco.biz