Tax benefits from marriage

caldi9

Happy new year,

There are numerous tax benefits from marriage in some European countries, while we have not come across a single in England.

Are there any ways to save taxes from being newly-wed?

Thanks

Grumpy_chap

If one of you earns less than the personal allowance and the other is basic rate tax payer, then you can transfer some of the unused personal allowance.

[Deleted User]

There was a married man’s allowance (yes Man) which vanished when independent taxation came in in 1990. Unless neither of you are higher rate taxpayers and one of you has unused personal allowances there are no income tax ‘benefits’ associated with marriage. 

Dazed_and_C0nfused

Or are old enough to be eligible for Married Couple's Allowance 

[Deleted User]

lisyloo said:

[Deleted User] said:

There was a married man’s allowance (yes Man) which vanished when independent taxation came in in 1990. Unless neither of you are higher rate taxpayers and one of you has unused personal allowances there are no income tax ‘benefits’ associated with marriage. 

My husband pays me dividends on which I pay 0% or 7.5% dividend income tax rather than him paying 32.5%. I can then gift him the money back tax free.
I’d call that a benefit (not available to everyone).

Your husband is a shareholder (as are you) and he repeatedly waives his entitlement. You receive the dividend and transfer it to him?

lisyloo

[Deleted User] said:

There was a married man’s allowance (yes Man) which vanished when independent taxation came in in 1990. Unless neither of you are higher rate taxpayers and one of you has unused personal allowances there are no income tax ‘benefits’ associated with marriage. 

My generous husband gifted me some of his inheritance to put into my ISA.
i would also call that a tax benefit associated with marriage.

sadly (and honestly said without smugness) these benefits are only available to those who can afford them, which is kind of ironic.
dont blame me I don’t vote Tory

Grumpy_chap

[Deleted User] said:

lisyloo said:

[Deleted User] said:

There was a married man’s allowance (yes Man) which vanished when independent taxation came in in 1990. Unless neither of you are higher rate taxpayers and one of you has unused personal allowances there are no income tax ‘benefits’ associated with marriage. 

My husband pays me dividends on which I pay 0% or 7.5% dividend income tax rather than him paying 32.5%. I can then gift him the money back tax free.
I’d call that a benefit (not available to everyone).

Your husband is a shareholder (as are you) and he repeatedly waives his entitlement. You receive the dividend and transfer it to him?

Or the only shareholder is the author.

Otherwise, a dim view is taken of alphabet shares, whether by formal arrangement or by practice.

No doubt the author has an Accountant to provide appropriate advice.

[Deleted User]

lisyloo said:

purdyoaten2 said:

lisyloo said:

purdyoaten2 said:

There was a married man’s allowance (yes Man) which vanished when independent taxation came in in 1990. Unless neither of you are higher rate taxpayers and one of you has unused personal allowances there are no income tax ‘benefits’ associated with marriage. 

My husband pays me dividends on which I pay 0% or 7.5% dividend income tax rather than him paying 32.5%. I can then gift him the money back tax free.
I’d call that a benefit (not available to everyone).

Your husband is a shareholder (as are you) and he repeatedly waives his entitlement. You receive the dividend and transfer it to him?

Sorry I mis-wrote it.
i can gift him other money back tax free e.g. my earned income (it’s allowed :-)
the benefit however is using both zero and lower tax bands which many married couples with limited companies do.

Fair enough but have a read of this - particularly the conclusions in the final paragraph. As Grumpy Chap said it is frowned upon. Additionally dividends are not earned income. 

To quote:

But HMRC can, and will, use the settlements anti-avoidance legislation to treat some of the waived dividend as income ‘belonging’ to the person waiving entitlement, if they can show that he or she still benefited from the money while less tax was paid overall – typically with waivers in favour of spouses who pay tax at lower rates.

https://www.taxinsider.co.uk/dividend-waivers-beware-the-pitfalls-ta

lisyloo

Grumpy_chap said:

purdyoaten2 said:

lisyloo said:

purdyoaten2 said:

There was a married man’s allowance (yes Man) which vanished when independent taxation came in in 1990. Unless neither of you are higher rate taxpayers and one of you has unused personal allowances there are no income tax ‘benefits’ associated with marriage. 

My husband pays me dividends on which I pay 0% or 7.5% dividend income tax rather than him paying 32.5%. I can then gift him the money back tax free.
I’d call that a benefit (not available to everyone).

Your husband is a shareholder (as are you) and he repeatedly waives his entitlement. You receive the dividend and transfer it to him?

Or the only shareholder is the author.

Otherwise, a dim view is taken of alphabet shares, whether by formal arrangement or by practice.

No doubt the author has an Accountant to provide appropriate advice.

thanks for you concern both, I will take it as well intended.
however we’d rather take it from qualified professionals who have a full understanding of all the details.

Jeremy535897

But HMRC can, and will, use the settlements anti-avoidance legislation to treat some of the waived dividend as income ‘belonging’ to the person waiving entitlement, if they can show that he or she still benefited from the money while less tax was paid overall – typically with waivers in favour of spouses who pay tax at lower rates.

As the article you quote says, the settlement legislation is normally only in point where the waiver had to be in place before the dividend was paid (due to an insufficiency of reserves), or there is a long standing arrangement.

Grumpy_chap

lisyloo said:

Sorry I mis-wrote it.
i can gift him other money back tax free e.g. my earned income (it’s allowed :-)

AIUI - anyone can gift anything to anyone else without there being an immediate tax implication.  The only change when gifts are between spouse are in relation to IHT.

lisyloo said:

the benefit however is using both zero and lower tax bands which many married couples with limited companies do.

And many do not do that using either alphabet shares or contrived employment - both have been heavily clamped down on in recent years.

Fortunately:

Grumpy_chap said:

No doubt the author has an Accountant to provide appropriate advice.

lisyloo said:

however we’d rather take it from qualified professionals who have a full understanding of all the details.

The professional advice from your Accountant who has the appropriate liability insurances and all the facts will always be better than the necessarily limited comments from any public forum.

We've probably also varied from the intent of the question asked by the OP.