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Beware of marginal tax rate traps – marriage allowance

Beware of marginal tax rate traps – marriage allowance

Finally this week we focus on the marriage allowance.

Since April 2015 some married couples have been able to transfer an unused element of their personal allowance to their spouse.

Up to £1,060 of a married persons personal allowance can be transferred to a spouse with a higher income, provided that the spouse is a basic rate taxpayer.

The relief is worth £212 per tax year per couple.

However watch out it is easy to fall over the cliff edge if the spouse with the higher income receives a pay rise which pushes them into the higher rate tax bracket, £42,385 for 2015/16.

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