Whilst a husband and wife have individual personal allowances for income tax purposes of £9,440 each, this only counts for anything if both work.
Where only the husband or the wife are in employment, the other personal allowance is effectively ‘lost’.
This could be set to change following new Conservative party proposals to allow a partial transfer of this tax-free personal allowance.
Treasury minister David Gauke has offered a “firm commitment” to help married couples with this tax break, which could be introduced in April 2015.
The plan would mean that husbands or wives who did not work could transfer part of their personal allowance to a working spouse, as long as that individual earned less than the basic rate of income tax.
Such a tax break would be worth around £150 a year.
These plans are a step in the right direction, and it is good to see part of an unused personal allowance able to be put to good use to reduce the overall income tax bill for a household.
However, it will add another layer of complexity to the income tax system and does little to reverse the punitive tax charges recently introduced which wipe out Child Benefit for many families, including unmarried households.
This recognition of marriage in the tax system is unlikely to prompt many, if any, couples to get married.
