Combining husband & wife tax free earnings allowance?

Scaredy_Cat_3

Hi

I hope I'm posting in the correct place. I've just been told that there is some way that you can combine tax free earnings allowances???

For example, my husband works full time and pays tax on everything above the personal allowance (can't remember but I think you can earn around 5k - 6k before you pay tax).

I have been out of work for the past few years and have recently become self employed but still only earn around 1k-2k per year.

Naturally, I won't pay tax on my income, but is it possible to add the unused portion of my tax free allowance to my husband's tax code so that he will pay less tax?

Hope I've explained that correctly. I always thought tax had to be personal and individual but I've been told you can combine it so I would appreciate any advice at all as this is complete news to me!

fengirl_2

No, personal tax free allowances are never transferable - the clue is in the name - 'personal allowances'.
What you may have heard concerns the transfer of capital from the name of the taxpaying partner to the other partner so that the interest earned would be counted as the income of the non-taxpayer, so making full use of that person's tax free allowance.

Scaredy_Cat_3

Could be ... the info I got was a bit vague but I thought it was worth enquiring about.

When you say transfer of capital, are you talking about savings? Because that would only mean that a bit more of the interest on the savings may be tax free - I got the impression that I was being told an extra portion of earnings could be tax free.

fengirl_2

Yes, capital would be money in the bank, or shares or other investments. Trsut me, your personal allowances can only be set against your own income - earnings or investments.

Scaredy_Cat_3

Thanks for that! I thought it sounded odd, but obviously I had to ask!