Save tax – get married!
Author: Russell SmithAugust 20, 2015
Over the years I’ve been in countless meetings where my recommendation to my client was to get married – to save tax.
As yet, I’m not sure if anybody has ever actually implemented the advice although I did tell someone the other day to get married and they looked pretty convinced so maybe they will be my first.
I was married at 21 and have just gone past 17 years of marriage (which makes me 38! I know, I don’t look a day older than 18*). If you are wondering why I got married at 21, I grew up in the church and basically it is what you did – marry young (enough said!).
If you are married and a business owner, here is what being married gives you (other than joy and happiness etc. etc.)…
1. You are able to split your limited company with your spouse
This can save you a good £2,000+ of income tax every year and can really help you with future tax planning.
2. If you have children, you can exploit the nonsensical child benefit rules
If you are a one-earner household earning £51,000 you lose child benefit. If you are two-earning household where you each earn £49,999, total income £99,998, you keep your child benefit.
If you are a business owner, it is likely that you can make this happen and keep your child benefit.
3. It helps with all the taxes that you are probably too young to worry about now but will be a godsend in the future – capital gains tax, inheritance tax etc.
The tax system has always favoured married couples (and now also favours civil partnerships and same sex marriages) on a whole host of taxes. You’ll see this once you start planning your future taxes.
*You should have seen me on my wedding day, I literally looked like I was 12. In fact my website guys actually asked me to grow a beard to give me more gravitas since they didn’t think prospects would believe the fact that I had been an accountant for 17 years.