Married Tax Allowance

Did you know you can share your tax free allowance and transfer a proportion with your husband or wife?

In this current financial year 2016/17 an individual can earn up to £11,000 before paying tax.
If you earn less than this in this financial year you can transfer £1100 (10% of your allowance) to your husband or wife, taking on some of their income, hence reducing their overall income by the same amount and reducing their tax bill.

You can get Marriage Allowance if all the following apply:

• you’re married or in a civil partnership
• you don’t earn anything or your income is under £11,000 for 2016/17
• The higher earner's income is between £11,001 and £43,000.  Their overall income needs to be in the lower tax bracket, couples where one member is in the higher bracket eligible.
• Both of you must have been born on or after 6 April 1935
  
  

So how does it save money?

For example...A wife works part time and earns £6000, her personal allowance for the year is £11,000, so she has a  spare £5000.  She transfers £1100 to her husband.

Her husband earns  £30,000 which makes him a basic-rate taxpayer (under the £43,000 threshold).  Once the allowance is transferred husband can now claim £12,100 of his overall income tax free instead of the initial £11,000 (11,000 + £1100 transferred).
This makes the husband £220 better off as he would have paid 20% tax on that £1100 which is now tax free!

In the majority of cases the amendment is made to tax code of the higher earner or for the self employed the allowance will be increased as part of their self assessment tax return.

How to apply
The non tax payer needs to apply to take on the additional income from their husband/wife, not the tax payer.
You can find out more and apply here https://www.gov.uk/marriage-allowance

Your New Year Finance Review

January can be a difficult time of year in terms of cashflow.
The bills come in after Christmas and even if you have budgeted for the festive season you may still find yourself short of money.

The new year for a lot of people is a great chance to review finances and see where you can save money. There are the obvious ways such as making your own lunch, cutting back on going out, not buying your daily coffee etc but often the bigger expenses are over looked.

 Mortgage review

2016 was on the whole a good year for those taking out a mortgage or remortgaging. As the interest rate fell buyers were able to borrow money at a favourable rate and some fixed that rate it for five years.

We often find that people who come to us have been on a variable rate for a number of years and haven't got round to changing it, but by fixing your mortgage at the current interest rate you can budget for the coming years knowing that your mortgage payment remains the same.

A good year last year unfortunately means that interest rates are bound to increase in 2017 so now is a great time to fix your rate. Speak to your adviser for more information or if your mortgage renewal date is coming up.

Life insurance

You may already have life insurance and critical illness cover but did you know that some providers offer great rewards whilst protecting you and your family?

The new year often brings a wave of people getting fit and losing weight and some providers offer great rewards for doing just that!

Talk to us about switching your life insurance and you could get cinema tickets or even free coffee just by tracking your steps!

Savings

It hasn't been great news for savers of late. Savers are not seeing much return on their investments. Interest rates look set to rise albeit it slowly in 2017, so why not think about paying off some of your mortgage instead. There are many ways to help you money work harder for you and we can help find the solutions.

Budget

And finally once you have made the changes write them down!
Putting a budget in place will really help you keep track of your money, even if it is as simple as 'income' and 'outgoings' so you know how much surplus you may have a month.
It doesn't have to be complicated, just a simple spreadsheet will do.

If you have any queries or questions on how you can improve your financial situation or if you are thinking of moving this year or making a change, call our office and make an appointment to speak to one of our advisers.
Initial consultations are free of charge.