Can I utilise OH tax allowance ?

missymugwump

Hi

I have recently become self employed
My husband is a full time student

Is there any way I can benefit from his tax allowance ?
Thank you


Also heard on the radio (radio 2) a couple of months ago about online accountancy company that has a set monthly fee,and because it uses an enhanced computer system it picks up all the latest tax allowances etc... and also uses your personal info to pick up lesser know tax breaks it got great reveiws from professionals & users

Just wondered if anyone knew the name or heard it also ? I was driving at the time and forgot to do the listen again feature on BBC

trevormax

The only ways I can think of to use your OH's tax allowance is if you receive interest from savings, you receive dividends or you receive rent from land or property. You can transfer the savings and the rental income into his name meaning he is liable to the tax on this. This will use up his personal allowance.

If you have shares you are getting dividends from, you can give these shares to your OH and you will not incur any capital gains tax. He will then receive the benefit of both his unused personal allowance and his unused basic rate amount because you do not pay tax on dividends when you are a basic rate taxpayer.

Personally, I would only want to use an accountant who I can see face to face. I want to know what qualifications he/she has and have a contact number if I need to speak to someone.

missymugwump

Thank you I know what you mean about the accountant but this service got great reviews

I was wondering if his allowance could in any way be used in addition to mine as he's not technically using it
Wishful thinking lol

trevormax

missymugwump wrote: »

Thank you I know what you mean about the accountant but this service got great reviews

I was wondering if his allowance could in any way be used in addition to mine as he's not technically using it
Wishful thinking lol

Lol sadly no. His personal allowance is exactly that . . personal. It can only be used by him and if he doesn't use it in a tax year he loses it.

Rolo_Tomasi

What is it that you do? Could you employ you husband in your business in any way ie as a PA or a book-keeper? As long as you paid him at least the minimum wage for actual duties performed I cannot see any problem with that.

Any decent accountant will keep up to date with tax changes. I personally don't believe that you can just enter your details into a computer system - no matter how enhanced it is - and trust that the information it spits out is complete. I realise that I am old fashioned but nothing beats a traditional face to face discussion.

roger_c

I'd agree with Rolo, can you get your husband to do some work for you, book keeping/secretarial work/PA or something else? You could then consider paying him a salary which is deductible as an expense when calculating your profits.

But be careful though if you go down this route, don't just pay him enough to the top of the NI threshold, or do it to avoid tax, unless the salary that you pay him is what you'd pay someone else for doing the same work. If you do pay him excessively The Revenue may argue that you are just trying to avoid tax, and his salary may then be assessed/added back onto your profits. (Btw the current (2009/10) NI threshold is £5,720, below this you need not pay employer's or employee's Class 1 NI or income tax on his behalf, so long as he has no other earnings or rental income).

Also as Trevormax says you could transfer your savings, investment income and rental income into his name. Transferring the investments that you receive dividend income on will only be beneficial to you if you are going to be a higher rate tax payer (i.e. earn >£43,875) in 2009/10 tax year. This quite a fundamental bit of basic tax planning point for higher rate tax payers. Hope that helps, and sorry don't know the name of that accountancy service you're talking about.

missymugwump

Thank you for the time taken in replying
I shall look into employing him as he does all my paperwork anyway as i'm too busy to keep it up to date