Writes Neil Armstrong, Tax Director at Baker Tilly Mooney Moore.
Neil Armstrong, Tax Director at Baker Tilly Mooney Moore
It goes without saying that Valentine's Day may not typically evoke thoughts of accountancy and tax planning, but for those who are feeling the love, there might be some financial benefits worth considering this February 14.
If your love language involves gift-giving, or you find yourself feeling generous this Valentine's, it's worth noting that certain gifts linked to marriage or civil partnership could be exempt from taxation.
This inheritance tax benefit encompasses the first £5,000 of a gift from a parent of either spouse, the initial £2,500 of a gift from any other ancestor, such as a grandparent, and the initial £1,000 of a gift from any other person.
Upon tying the knot, the Marriage Allowance allows you to transfer £1,260 of your Personal Allowance to your spouse or civil partner. If you're not currently employed, this could potentially reduce your partner’s tax by up to £252 in the tax year, from April 6th to April 5th the following year.
With regards to Capital Gains Tax, married couples and civil partners can enjoy the perk of transferring assets without incurring tax implications. This means you can put your house and/or other assets in your new spouse’s name without incurring a tax liability.
In the unfortunate circumstance of a loved one’s death, it is also worth keeping in mind the Inheritance Tax benefit of passing on your estate to your spouse or civil partner, is completely tax-free.
This Valentine's Day, it is essential to recognise that while love may be blind, your inheritance plans need a clear tax vision. Navigating the love language of financial planning this Valentine’s Day can ensure that you seal the deal with a tax friendly ‘I do.’ After all, what better way to express your commitment than by planning your financial future together?