Following the introduction of independent taxation in 1990, every individual who meets the residence conditions and income conditions discussed in E1.910 is entitled to the personal allowance for the year. The allowance is deducted at Step 3 of the income tax computation in ITA 2007, s 23 (ie deducted from net income, see E1.101B)1.
Transferable tax allowance
From 6 April 2015 onwards, in certain circumstances it is possible for one spouse or civil partner to transfer 10% of their personal allowance (rounded up to the nearest £10) to the other person under the transferable tax allowance provisions. Unlike the personal allowance, the transferee receives relief for the amount transferred by way of a 20% tax reduction at Step 6 of the income tax computation. Therefore, although the transferor's personal allowance is reduced, the transferee's personal allowance is not increased.2
The transferable amount of the personal allowance was £1,260 in 2021/22 and the level of the transferable amount is frozen at this level until 5 April 20283. The
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Web page updated on 17 Mar 2025 17:37