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Tax question
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yabbadoo
Posts: 62 Forumite
in Cutting tax
I'm married, early retired, will shortly receive State pension in addition to my Company pension.
My wife has no income whatsoever.
Our situation is by no means unique.
The difference between "single" and "married" personal tax allowance is minimal.
Long time ago, tax law allowed married couples to claim "Separate Assessment" - each taxed as a single person, and any unused allowances transferred to the spouse to ensure that the couple benefitted from the total allowances. Entirely legal (and fair, in my opinion).
Is there a case to be made to allow "marrieds" total tax allowances to be fully used against income?
The current system is fair ONLY when both marrieds are taxpayers (dual income).
My wife has no income whatsoever.
Our situation is by no means unique.
The difference between "single" and "married" personal tax allowance is minimal.
Long time ago, tax law allowed married couples to claim "Separate Assessment" - each taxed as a single person, and any unused allowances transferred to the spouse to ensure that the couple benefitted from the total allowances. Entirely legal (and fair, in my opinion).
Is there a case to be made to allow "marrieds" total tax allowances to be fully used against income?
The current system is fair ONLY when both marrieds are taxpayers (dual income).
Learn from the mistakes of others - you won't live long enough to make them all yourself.
0
Comments
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Hi,
You cannot transfer a personal allowance between spouses. It is still possible to do this with the Married Couples Allowance but this allowance was abolished a couple of years ago (unless you were 65 then).
All you can do is to make sure any investment income is in her name so that the interest can be paid gross.
If you do this don't forget to be nice to her as the capital willl be hers!
Regards
ElaineIf it’s not important to you, don’t consume it0 -
Appreciate your interest, Elaine, but I thought I'd established what the position is.
The posted question was - Is there a case to be made for change ?
The personal financial situation is, I suggest, very common indeed. As it stands, tax and benefits laws actually disadvantage married couples with a single income-earner.
Learn from the mistakes of others - you won't live long enough to make them all yourself.0 -
If there is "A case to be made" would you care to make it here?...............................I have put my clock back....... Kcolc ym0
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The current system is fair ONLY when both marrieds are taxpayers (dual income).
Well that comes down to planning.
You dont need to be working to make pension contributions and investments dont need to be in the name of the person with the income.
A couple should always aim to make their retirement plans equal to ensure that the tax free allowance is utilised and not wasted.
A case cannot really be made when poor planning means you cannot utilise both allowances.
It would be nice for some, make no difference to others but cost the treasury loads and what they lose in one area, they would claw back in another.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0
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