A tax break for married couples will be introduced at the beginning of the 2015-16 financial year, the government has confirmed.
The Marriage Tax Allowance will benefit more than four million couples, it claimed, as well around 15,000 couples in civil partnerships. Couples in which one member does not work or works only part time can transfer the unused part of their tax free allowance (the amount they can earn without paying tax) to their partner, cutting their overall tax liability. Their husband or wife must be a basic rate tax payer.
Introducing the measure, Chancellor George Osborne said the Marriage Tax Allowance was “just a start” and that it would be linked to the rate of personal allowance. He told MPs:
“We will introduce a new uprating mechanism that ensures that the new married couples tax allowance is automatically increased in proportion to the personal allowance.”
“Four million families will benefit, many of them among the poorest working families in our country. This measure, along with the others…ensures that across this parliament our policies are progressive — showing we’re all in this together, with the very rich paying the most.”
Lower income families who benefit from the allowance could lose benefit payments as a result, the Institute of Chartered Accountants in England and Wales (ICAEW) warned.
“The Marriage Tax Allowance adds further complexity to an already complicated tax system that tax payers struggle to deal with,” Anita Monteith of ICAEW added.