Does your partner earn more than you?
The allowance allows you to transfer £1,260 of your personal allowance to them in return lowering the higher earner’s tax bill for the tax year. Your personal allowance represents the tax-free earnings permitted in each tax year, encompassing all taxable income such as salary, pensions, and other forms of income. Pensioners drawing a pension may also qualify. The allowance does have qualifying circumstances such as:
- Couples must be married or in a civil partnership. Just living together does not qualify.
- One person must be a non-taxpayer earning less than the £12,570 personal allowance between 6 April 2023 and 5 April 2024. The non-taxpayer must earn £11,310 or less to receive the full benefit.
- The second person must pay a basic 20% tax rate. Higher or additional-rate taxpayers are not eligible.
- Both parties must have been born on or after 6 April 1935.