In Budget 2014, it was announced that from April 2015 a spouse or civil partner may transfer up to £1,060 of their personal allowance to their spouse/civil partner, provided that the recipient of the transfer is not liable to income tax above the basic rate.
Therefore, the use of this measure is restricted, but it can provide a benefit where one spouse or civil partner has an income less than their personal allowance (this will be £10,600 for the majority of people in 2015/16).
At the date of publishing, no announcement had been made as to how the election would be made. But the lead proposal put forward is that one party will apply on-line to transfer the allowance to their spouse or civil partner and HMRC will notify the recipient about the subsequent change to their tax code.
By Jo Nockels
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