Marriage Tax Breaks
For those who want to leap into marriage this year (according to an old Irish legend, women are allowed to propose to men on 29th February) there are some financial breaks for taking the plunge:
You may be able to claim marriage allowance to allow you to transfer 10% or £1,060 of your Personal Allowance to your husband, wife or civil partner (in 2016/17 this rises to £1,100). This reduces their tax bill by up to £212 in the tax year. To be of benefit, you as the lower earner should have an income of £10,600 or less.
Capital Gains Tax (CGT)
A couple can pass ownership of assets between them free of tax (unless you separated or didn’t live together at all in that tax year). And if you are selling assets that would attract CGT, you will be taxed on any gains over £11,100 in 2015/16 but as both spouses have a CGT exemption, assets may be transferred and shared so that effectively a couple can realise gains of £22,200 before CGT is due.
If family are feeling generous, there may be no inheritance tax on wedding or civil partnership gifts worth up to £5,000 for a child, £2,500 for a grandchild or great-grandchild and £1,000 to anyone else. The gift must be given on or shortly before the date of the wedding or civil partnership ceremony.
Inheritance Tax (IHT)
Your estate is exempt from IHT if you left everything to your husband, wife or civil partner (who lives permanently in the UK). Again married couples and civil partners can give any value of gifts to each other during their lifetime without IHT being due on them.
There are more benefits to being married than you may have thought so maybe consider taking that leap! For more information on any of the points in this article you can contact Clare Vaughan at firstname.lastname@example.org or 01872 271655