Valentine’s Tax Benefits for Couples in 2020
As couples around the UK prepare for Valentine’s Day, the ICAEW highlights that, although it may not be the most romantic reason, getting married or entering a civil partnership has plenty of tax benefits…
Tax Benefits for Couples
Wedding presents from the friends and family to the couple can be tax effective! Parents can gift up to £5,000 and grandparents up to £2,500, without tax implications.
Married couples could also be eligible to claim the marriage allowance to minimise their income tax bill. Eligible partners can’t be high rate taxpayers, and the partner earning less must have income below the personal allowance, which is currently £11,850. Partners must not be eligible for the married couple’s allowance that is currently available to some older people.
If the couple are eligible, the marriage allowance permits one partner to transfer up to 10% of their personal allowance to their husband, wife or civil partner, which in tax year 2018/19 can decrease their tax liability by up to £250.
Ownership of Assets
Additionally, ICAEW states that a marriage generates more of a ‘fluid’ environment for Capital Gains Tax and Inheritance Tax, which allows the couple to pass ownership of assets between them free of CGT and IHT, this is regardless of the amount.
The standard rate of IHT is 40% on estates that are worth more than £325,000 but couples can pass on their estate to their spouse completely tax free and pass on a combined £650,000 to children!
You can share dividends with your spouse or civil partner if they are a shareholder or director of a shared company.
Private client services at Cardens Accountants
Cardens pride ourselves on taking a proactive approach to tax affairs and we will look for ways to improve your tax position, rather than just report on it.
We are happy to find tax benefits for couples. Book your free consultation or contact us: 01273 739592
[INFOGRAPHIC] Tax Benefits for Couples