Tax question

yabbadoo

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).

Elaine_Wilson

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

Elaine

yabbadoo

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.

Robert_Sterling_3

If there is "A case to be made" would you care to make it here?

dunstonh

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.