Thousands of married or civil partner landlords save tax with the new Married Allowance tax break later in the year.
The Married Allowance is probably more attractive to property investors who earn a small amount of rent each year as the qualifying income limit is capped at £42,385.
Chancellor George Osborne claims up to 4 million married couples and 15,000 civil partners could benefit from the allowance.
The allowance is worth £212 a year or £17.66 a month.
The qualifying rules mean:
- One spouse or civil partner must earn less than £10,600 a year – the most anyone can earn without paying income tax
- The other cannot have an income of between £10,600 and £42,385 including their £10,600 personal income tax allowance
- Neither should have been prior to April 6, 1935
The allowance works by shifting £1,060 of the lowest earning partner’s personal allowance to the other partner, increasing their allowance to £11,660.
Qualification is not automatic – couples and civil partners must register online.
Within 14 weeks of registration, HM Revenue & Customs (HMRC) will contact the couple, who have to complete and application form.
Online applications are open on the HMRC web site
Osborne said: “We made a promise to introduce recognition of marriage into our tax system and now we’re delivering on that promise.
“This includes updating the tax system so that it recognises marriage and civil partnerships.
“Our new Marriage Allowance means saving £212 on your tax bill couldn’t be simpler or more straightforward.”
Even if the pre-April registration is missed, couples can claim relief for the entire tax year providing an application is made before April 5, 2016.
Higher rate (40%) and additional rate (45%) taxpayers cannot apply for the allowance.
If one partner was born before April 6, 1935, tax relief is available through the Married Couple’s Allowance.
Thousands of Married or Civil Partner Landlords Save Tax with the New Married Allowance Tax Break Later in the Year – http://t.co/kupJvlEIbK
— LandlordZONE (@LandlordZONE) February 24, 2015