To think married couples should be taxed together

[OneAmberFinch]

Philosophically, I think it's a couple's business how they divide their responsibilities between earning and working in the home, and the tax system should treat them as a single unit.

I would extend this to tax on investment products as well: currently, virtually every serious product (available to the masses i.e. not custom family trusts etc) is in a single person's name. For example, there are barely any joint savings accounts that pay a decent interest rate, pensions/ISAa are in individual names etc.

If there were a simple way to tax jointly, I think more of these products would exist.

Why do I care about this? Because I think it would solve quite a lot of the issues that come up on MN w.r.t. money in relationships - "you can't take a 3-year maternity leave, or if you do you need to beg your DH to donate to your pension".

I don't think it's enough to just be able to inherit someone else's pension/savings - beneficiaries can be changed. I think throughout life, many couples would like to truly manage their finances jointly, but the tax system and types of financial accounts available don't make it possible.

I think there's a lot wrong with the tax system for shared households/single.

DP died. We each earned approx £50k so were both basic rate taxpayers.

Since he died, my costs are basically the same. I get a small pension from his employer which puts me in the higher tax bracket. The household income is much less, but I pay more tax.

Everything else costs more when you're single too, from food shopping, to days out, train travel and holidays.

And the child benefit thing is absolutely bonkers.

It's not that unusual for women to be on the same or higher salaries then their partners.

From the women I am friends with this is the case for about 2/3rds of being on the same or more.

Also treating as a single unit unless they are going to significantly change the thresholds would leave a lot of families worse off. So you would end up with more women quitting and making less tax which makes zero sense!

Yes in Ireland you can choose to be jointly or separately taxed.

Financial advice is to make sure you are protecting your own future. Too many people stick their heads in the sand and think it’s too difficult and default to the main earner taking control.

Independent finances and taxation give married women freedom and parity with non married women. Prior to 6/4/90 married women often paid more tax than unmarried women due to the way the allowances worked.

35 years we have had privacy and independence in taxation and hopefully long shall it remain (which it will because it doesn’t meet the requirements of an equality impact assessment due to the disparity it would cause between married/unmarried people).

For example, there are barely any joint savings accounts that pay a decent interest rate

Right, hold on ... setting aside the fairly obvious arguments about women having fought to have control over their money...

You think you deserve higher savings interest just because you are a couple? Conversely, I assume that you'd also be OK with single people having lower mortgage rates? Hmmm, thought not.

Sorry, but the entitlement here is truly shocking. Couples should not have any financial, tax or other advantages because they already have plenty - plenty - of advantages in society over single folks.

I agree with you @OneAmberFinch for the simple reason that when it come to UC, it’s couples (not even married!) that are taken into account.
I feel this should be the same with child benefit too. (I’m thinking of the case where 1 person earns over the limit and you dint receive anything but 2 people earning each just under the threshold do).

Im not sure what the relationship with joint savings is. But it certainly would clarify what each person earns - ie it would avoid the many many times on here where women dint know what their dh earns or what they have savings wise etc…. whilst Theyre asked to contribute 50/50 because otherwise Theyre scroungers…..

No, I think PP means the best rates are only available to sole account holders, not joint accounts...she's not asking for better, only the same.

35 years we have had privacy and independence in taxation and hopefully long shall it remain

@TheCountessofLocksley the problem fir me is that that ‘privacy and independence’ is one that BOTH men and women have.
Now on paper, it’s great.
But what happens in the many cases where women dint know how much their dh earns? Don’t know how much savings they have?

A lot of people don’t have that ‘privacy’ anyway because as soon as you receive UC, it’s based on BOTH people earnings and savings.
So your entitlement you feel has been hard worn? It’s only for the richest anyway…..

And that’s wo talking about the fairness of the system.
Where a family with two people earning £40k pay vastly less taxes than a family with 1 big earner at £80k (and the other earning ‘pocket money’ at under £12k)

@Newfun Yes, I understand that, but where will the magic money come from for this? Someone will pay - that someone being sole account holders. If banks thought it was profitable and good business they'd be doing it already. No, there's more than a whiff of unconscious couple entitlement here.

It's really simple and easy to change around. I earn more than my husband so I use part of his tax credits to offset my taxes, and take some of his rate band too. This maximises our allowances

The option to file as a couple would be great in theory but only works when the couple is in a respectful relationship. For example, if a sahp is reliant on their working partner this set up would give the working partner a tax break but requires them to be fair with family money.

If you think household income reforms would give women more money…the likeliest outcomes are that the govt would use it to take more tax from people, and further restrict benefits.. And possibly it’ll mean even more people don’t marry.

I've probably introduced two separate concepts here but it's because I feel they're related.

My big issue is that if a couple wants to have fully joint and equal finances, this is effectively not possible for the average couple in the UK (i.e. no trusts, businesses to run money through etc). Pensions and ISAs and high-interest savings accounts all have to be in a single person's name, so you have to just trust that the person keeping the money will share it and will always keep that promise.

I think one of the reasons they don't exist is that the admin hassle of taxing investment income (e.g. interest on a savings account) on a joint account is too much, because there is no joint "entity" that exists in the tax system.

That's why I've linked them in my head. It's an add-on point to the first one about salary income.

It also gives the SAHP visibility into their partner's income, in exchange for sharing their personal allowance - obviously the working partner can still control where the money gets paid but that's the case now, right?

Whatever way you set it up, SAH parenting only works in a respectful relationship. File jointly or separately,if you're reliant and in an unfair relationship, it's bad either way

Doesn't work like that in Ireland. We have more benefits, fairer benefits system, more protections for women, better services on the whole, and joint taxation which saves us money, not costs more.

You can transfer the non earning spouse's personal tax allowance to the spouse who is earning. I have done this. It's called Marriage Tax Allowance.

I heard about it from Martin Lewis www.moneysavingexpert.com/family/marriage-tax-allowance/

An extra grand is an extra grand that single people don’t get.

I’m baffled as to why people are advantaged based on their domestic and relationship choices. Everyone should pay the same rates, married or solo. Lifestyle choices shouldn’t be penalized/rewarded.

An extra grand is an extra grand that single people don’t get.

I’m baffled as to why people are advantaged based on their domestic and relationship choices. Everyone should pay the same rates, married or solo. Lifestyle choices shouldn’t be penalized/rewarded.

Yay. More single people subsidising those with dual incomes….

@Flutterbyby that’s nice, but I doubt it’ll happen like that here - given the overspent and huge cost pressure nature of uk public spending. There is no campaign to give serious tax breaks to married couples. There is a move to wanting to tax on household income, but not to reduce tax.

I do think all adults should get a tax allowance and it be applied to the household income though.

But single people are already at a significant financial disadvantage in a society which expects most people to live in households with two incomes.

Do you have an idea for how to fund this OP without penalising single people?

If those couples don’t want it I will take it. I could do with it.

I think that in this scenario there would be combined tax brackets.

At the moment if you were a couple and you both earnt 30k you would be each entitled to your tax allowance and then taxed at 20% on the remaining balance. If instead you had one of you earning 60k and the other a stay at home parent you would be entitled to your spouses tax allowance but you would pay tax of 40% above the 50k threshold. So while the gross household earnings are the same the take home would be lower. So there is an arguement that why shouldn't from HMRC's benefit you be able to be seen as a joint entity and doube the thresholds so that the tax is equivalent.

However, this works on the assumption that it is twice as expensive to be a couple as it is to be single which isn't really true. When you live together in one house you have one mortgage, one set of bills etc. Your electricity bills do not double because there are two of you. If a single person trying to run their own household and pay their own bills has to pay more tax than a married person because their partner decided to stay at home for whatever reason that doesn't seem particularly fair.

I think the reality is that whatever you do with regards to income tax is going to be unfair to someone.

However, I personally think there should be ISA/ investment products available to couples should they chose to use them. It would promote the idea of joint savings and as long as the thresholds were kept the same it would be fair. Albeit it does open the door to abuse. With any joint account one person can decide to make a withdrawal without the others consent and like many have said which could end up with people losing access to their savings. That being said it would be nice to have the option for those who are in stable relationships.

Me too