BlogTuesday 28th November 2017
How can I transfer my personal allowance to save tax if I am married?
Darren has been working as a dental nurse earning £18,000 and studying to become a dentist. Darren pays income tax at the basic rate tax band of 20% on his earnings above £11,500. His wife Divina doesn't work and looks after their three-year old son Duncan.
As Darren is a basic rate tax payer earning between less than £45,000, they elect to transfer 10% of Divina's £11,500 tax free allowance to Darren. Divina's allowance is now reduced from £11,500 to £10,350 and Darren has a tax reduction of £230. As a result, Divina still pays no tax and Darren pays £230 (£1,150 @ 20%) less tax.
As Divina hasn't worked since 2015 and Darren has worked and payed tax in the two previous tax years the allowance transfer can be backdated to 2015. This results in a further £432 tax saving to Darren.
You can make a claim online at https://www.gov.uk/apply-marriage-allowance