Monday, 27 April 2015

Raising of Tax free Personal Allowance



All tax payers will benefit from the raising of the tax free personal allowance. We knew it was climbing to 10,600 in  April 2015 but the Chancellor has revealed it will rise to 10,800 in April 2016 and £11,000 in April 2017.

From 6th April, married couples and civil partners who earn less than the £10,600 income tax personal allowance for 2015/16  will be  able to transfer £1060 of their allowance to their spouse, so long as the recipient doesn't pay higher rate (40%) or additional rate (45%)  tax. 

This also applies where the higher earner is self employed and it means that together a couple will pay less tax.

The plans were first announced in in 2013 and published in the Budget 2014. While they don't come into force until 6th April, from today couples can register their interest online via the Marriage allowance site.

Anyone registered will then be contacted by HMRC to ask whether they want to apply. People can register at any point in the tax year and will still receive the benefit of the allowance.

To be eligble, couples must both be born on or after 6th April 1935 and the recipient of the personal tax free allowance must have an annual income of between £10,601 and £42,385 during the 2015/16 tax year.

In order to receive the tax break, one person in a couple will apply online to transfer the allowance to their spouse or civil partner and HMRC will tell the recipient about the change to their tax code. 

If you need help, email andrewlogan@taxassist.co.uk and we will send you the link to get registered.

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