Carolina wrote:...I assume this is only for UK tax residents moggieman?
Kilkis wrote:No. I think it is the other way round. One person has an income bigger than his/her tax free allowance so he/she is paying tax on the difference. His/her partner has no income (or possibly income less than her/his tax free allowance?) so is paying no tax and her/his tax free allowance is being wasted. Under this scheme she/he can transfer some of the unused tax free allowance to the one who is paying tax and so reduce their tax allowance.
It is done to correct an anomaly. Take two couples. The first couple both work and both earn £11,000 per year after deducting National Insurance. They pay no tax because the tax free allowance of each is £11,000. In the other couple one goes to work and earns £22,000 after deducting NI while one stays at home. The person going to work would pay £2,200 tax. Both couples have the same gross income but a very different tax burden.
Am i on for a commision. ???
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