Did you realise that if you are a non-tax payer & your partner pays tax at the basic rate limit you could transfer 10% of your personal tax allowance to them & get them a further £230 tax free income on their allowance. What’s more, if you are eligible you can have this backdated to April 2015 when this tax break was introduced. By backdating the claim, this could be worth up to £662 for you and it’s so easy to claim. However, before you claim your tax rebate there is some basic criteria which you need to check:-
- You must be either married or in a civil partnership. Unfortunately, living together does not qualify.
- One spouse must be a non-tax payer & the other needs to have earnings that fall within the basic rate band. For the current tax-year the non-tax paying spouse’s income should be less than £11,500 & the tax paying spouse’s income should be between £11,500 and £45,000. If you live and pay tax in Scotland the tax paying spouse’s income should be between £11,501 and £43,000.
- It is the non-tax payer that must apply to transfer the tax allowance.
- Both spouses must be born after 6th April 1935.
- A recent change in the Autumn budget has also meant that claims can be backdated even if your spouse has passed away since the tax break was introduced in April 2015.
- Once your claim is successful you will automatically have 10% of your tax allowance transferred to your spouse in future years as long as you both continue to qualify.
- It doesn’t matter how much unused personal allowance the spouse has, the amount of personal allowance transferred will always be 10% of the allowance for the tax year in question, i.e. no more, no less. However, because the non-tax payer has to transfer 10% of the personal allowance to claim, there will be some situations where the non-tax payer has less than 10% unused tax allowance. In this situation you should still make the claim but it means the non-tax payer’s income will exceed their allowance and so end up paying some tax on the amount they have gone over. As a couple you will still save tax, just not as much.
- There will be some scenarios where it is not worth applying for. For example, if the non-tax payer income is just below the Personal Allowance and the tax payer’s income is just above the Personal Allowance, this could result in an increase in tax. If in doubt just contact us and we’ll do the sums before you apply.
The maximum rebate of £662 is calculated as follows:
2017/18 Tax Year – transfer 10% of personal tax allowance to spouse = £230 rebate
2016/17 Tax Year – transfer 10% of personal tax allowance to spouse = £220 rebate
2015/16 Tax Year – transfer 10% of personal tax allowance to spouse = £212 rebate
Backdating the claim adds up to a huge £662.
You can claim by applying on-line – just use the following link: