The Monetary advantages if being marriedOctober 15, 2014
Ella Mason, an experienced freelance writer, wrote this article. Ella specialises in providing useful and engaging advice to small businesses. Follow her on Twitter @ellatmason
How are married couples better off?
It’s not often that Her Majesty’s Revenue and Customs department (HMRC) gives the public a present, but in this year’s budget, Chancellor George Osborne announced that he would introduce a new tax break for couples. According to The Daily Telegraph 4.1 million couples receive a ‘transferable tax allowance worth up to £200 per year from April 2015.’ The new rules don’t apply to those earning in excess of £42,285 per annum. If you want to find out more about other allowances that could help your family budget click here for more information.
If you are married you can reduce the inheritance tax bill
Many people want to ensure that their property and assets can be passed on to the next generation. This is where marriage can reduce your heirs’ inheritance bill. If you die your assets can be passed to your spouse without incurring any inheritance tax. Upon the death of your spouse your heirs can claim the allowances of both parents before they will receive a bill from HMRC. Currently inheritance tax is payable on any assets valued at £325,000 and over, but if you’re married your joint assets can be passed to your children and they will only have to pay tax, should the value of these assets be over £650,000.
You can save on your income tax too
In theory everyone in the UK is taxed as an individual, though there are a few breaks for married couples that don’t apply to those who are living as co-habitees without a marriage licence. You are allowed to switch your assets when you are married, especially if one partner earns less than the other. A feature in The Daily Telegraph explains the reasoning behind this loophole in more detail. Essentially, though, the high earning spouse can allow the low earning spouse to benefit from any interest or investments without receiving an income tax bill.
You can reduce your car insurance too
If you insure your car with your spouse, you can cut your motor insurance costs in half. Hugh Kenyon, from the insurers LV explains the industry’s thinking behind this pricing policy. ‘Couples and families tend to make fewer and less expensive claims than their single counterparts.’ Kenyon added, ‘many accidents tend to happen after 10pm when those with young children are more likely to be at home than on the roads.’
Marriage should also be for love, not just finance
If you want to learn more about the complex tax rules for married couples, then go and seek the advice of a financial advisor. Most importantly, remember that you got married for many other benefits and not just to enjoy a monetary advantage.