If you are married, and if you and your spouse do not pay tax at the higher rates, you may benefit to the tune of £4 per week if the Conservative party wins the next election, or controls a coalition, from 2015.
It is estimated that four million married couples, and fifteen thousand civil partnerships, would benefit from a scheme that would allow the transfer of part of any unused personal allowances, from one spouse to the other, up to £1,000 per tax year. The personal tax allowances in April 2015 will likely stand at £10,000, or more. So if one spouse has income below this amount, and the other income above, then £1,000 of the lower paid spouse’s personal allowance can be transferred.
The maximum benefit to couples who could claim under this scheme is £200 – £1,000 at the basic 20% income tax rate. Not every couple eligible to make a claim under this scheme would benefit to the same degree. For example, if the lower paid spouse had income of £9.500 ant the personal allowance was £10,000 for 2015-16, then the maximum allowance they could transfer is £500. This would save their spouse £100 (£500 x 20%).
In 2015-16 the higher rate income tax rate of 40% will apply to income in excess of £42,285. Couples where one person earns more than this amount will not qualify for this tax break.
The scheme is targeted at married couples. Accordingly, couples in long term relationships, but not married, will not be able to make a claim.