Individuals are entitled to a personal allowance according to their age and their income. These personal allowances provide an amount of tax-free income for a tax year.
Personal allowances cannot be transferred to another individual.
For the tax year 2015/16, an individual who is not liable to income tax above the basic rate will be able to transfer up to £1,050 of their personal allowance to their spouse/civil partner, provided that the recipient of the transfer is not liable to income tax above the basic rate.
From 2016/17 the transferable amount will be 10% of the basic personal allowance.
Further provisions will deal with changes to individuals’ marital or civil partnership status, such as divorce, dissolution and death.
These provisions will benefit married couples or civil partners where one spouse/civil partner does not pay income tax and the other pays income tax at the basic rate.