family taxation matters

Question 1

what is marriage allowance

Answer 1

Spouse and civil partner can trasnfer personal allowance of 1260 pounds. not more or less.
PA of transferrer will reduce, and receiverwill get tax credit of 20% on 1260 (252 pounds)

both spouses must be basic rate tax payers to claim this relief

Question 2

why would people want to transfer personal allowance

Answer 2

in case one partner has income that is lower than personal allowance, cant use fully

Question 3

can marriage allowance create a tax refund?

Answer 3

no

Question 4

if 2 spouses own a jointly owned source of income, how will income be distributed?

Answer 4

general rule is 50/50 regardless of ownership ratio
however an election can be made to distribute according to actual ownership ratio

Question 5

when would actual ownership ratio distribution be beneficial ?

Answer 5

when the person who has more ownership has a lower tax rate (basic band)

Question 6

can this election be done for jointly owned bank account creating saving income?

Answer 6

no, always 50/50 for bank accounts

Question 7

what is the rule of distirbution for dividend income from close company

Answer 7

always divided in actual ownership ratio

Question 8

CGT implication - disposal of jointly owned property?

Answer 8

general rule: gain will be divided 50:50
election can be made to divide according to actual ownership ratio
election will be favorable when actual ownership of spouse having lower rate of CGT is greater

Question 9

do children get taxed in UK?

Answer 9

yes same as adults
normal PA and tax bands

however if source of income is transferred by parents (eg. saving account opened by parents and saving income being received) then this income will be taxed on parents rather than children