I have heard there is a new allowance for married couples allowing them to transfer some personal allowance between spouses. Can you explain what this is and how it works?


As of 6th April 2015 there has been a new scheme in place which allows individuals to transfer part of their unused personal allowance to their spouse or civil partner saving up to £212 in income tax.

You must meet all of the following criteria to qualify:

  • Be in a marriage or civil partnership
  • Have an annual income of less than £10,600 (including pensions, savings and investments)
  • Your partners annual income is greater than £10,600 but does not exceed £42,385
  • You were both born on or after 6 April 1935

Currently the individual personal allowance stands at £10,600 and anyone earning less than this does not pay any income tax. Under this new rule as much as £1,060 of this allowance that remains unused in the 2015-16 tax year can be transferred to a partner, so long as they are only paying tax on earnings that fall within the basic-rate band (£10,601-£42,385).

For example – partner 1 has a total income of £10,000 and partner 2 has an income of £40,000. Given that partner 1 has only £600 of unused personal allowance (£10,600-£10,000) this is the maximum that can be transferred to partner 2. This would have the effect of increasing the personal allowance of partner 2 to £11,200 shifting £600 out of the basic rate of tax into untaxed income. As such this transfer would save the couple in total £120 in tax over the 2015-16 tax year.

You must register you interest with HMRC at the below link  to register your interest for this relief so it is not lost:


As with all tax reliefs there can be tax planning opportunities and complications. We recommend that you seek professional advice should you be unsure as to your status.