Is there anyway for my wife to transfer her personal tax allowance to me?
Posted by Financial Advisor | Filed under Tax Savings
Recently having a baby, we have decided that me wife will not go back to work as her salary after paying childcare, extra travel etc. and all that would not be worth very much at the end of the month.
So, is there any method of her transfering her personal allowance to me to enable some benefit to us for bringing up our own child (as the government apparently encourages!)? as we get hardly any child tax credit (£40 a month) due to my salary. Where as people who are on benefits not working get tons of things paid for etc.
Thanks
No, you cannot give your wife your personal allowance.
However, and I don't know your circumstances, if you had substantial income from investments (shares, bank accounts, property) you could gift half/part/all of that to her so that she received some of your income, thereby reducing your taxable income and utilising her tax free amount.
The only other alternative would be to become self employed and pay her a salary (again reducing your taxable income and utilising her tax free amounts), BUT she would have to do work deserving of the pay (you can't just pay her money and the business would have to be trading for sound economic reasons).
But if you just have salary you are stuck and her allowance will go to waste.
unfortunately not, blame Gordon Brown, as Chancellor he scrapped the married couple's allowance where you could share tax allowances when one person wasn't working.