Balancing the Books of Love on Valentine’s Day

If you're feeling the love this Valentine’s Day, there might be some tax benefits to keep in mind. In terms of Inheritance Tax, certain gifts made in connection with marriage or civil partnership may be exempt from taxation. These include:

• The initial £5,000 of a gift from a parent of either spouse.
• The initial £2,500 of a gift from any other ancestor, like a grandparent.
• 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, assets can be transferred between married couples and civil partners without incurring tax. This means you can put your house and/or other assets in your new spouse’s name without incurring a tax liability. It is also worth keeping in mind the Inheritance Tax benefit of passing on your estate to your spouse or civil partner, in the unfortunate case of death, is completely tax-free. This Valentine's Day, love may be blind, but 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.’ To discuss any aspect please get in touch with Neil Armstrong, Tax Director E:neilarmstrong@bakertillymm.co.uk Tel: 028 9032 3466