It’s Valentine’s Day tomorrow. which means I’ll be buying lots of chocolates and teddy bears…for my daughters. Louise can make do with a card and the joy of having me in her life.
I’m not going to get too romantic, but Valentine’s Day becomes a bit more interesting to an accountant when there are some tax savings!
So, what are the tax breaks for getting married or entering a civil partnership? And will these be enough to get you to pop the question?!?
- For a wedding gift, each parent can give up to £5,000 to the happy couple with no tax implications. And the grandparents can give £2,500 each. And anyone can give £1,000.
- If one of the married couple earns under £12,570, they can transfer some of their tax-free allowance to their other half. This would save £252 in tax in the current year. To qualify, the partner must be earning £50,270 or less. You can also backdate this claim to any tax year from 5 April 2020 onwards as long as you both met the criteria in that year.
- You can double up on the annual Capital Gains Tax exemption – by buying/selling an asset together, you can now make a profit of £6,000 tax-free.
- You could pay into your partner’s pension and use their annual tax-free allowance.
- There are far more generous Inheritance Tax allowances when you’re married.
And, with Louise working at JDA, I can treat her to a £50 gift with the taxman chipping in with tax relief. Or use up some of the £150 annual tax-free allowance for wining and dining her.
Romance isn’t dead in the Davies household!
See you next week
Jon