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Original poster

Married, SAHM - why don't I get to use my personal allowance?

106 replies

Daffodilly · 22/03/2012 21:04

Can someone help me understand this. DH earns a good income (higher rate taxpayer). Partly because he works long hours to earn this, and also because we can fortunately afford to and I want to, I am a SAHM.

My question is that because I don't work I don't get to claim any of my tax free allowance. Why can't I give him my tax free allowance as he is working to support me?

I'd genuinely like to understand the rational as it seems unfair (though I realise just one of many things that aren't fair in our tax system)?

OP posts:
OctopusSting · 22/03/2012 21:06

Independent taxation is the premis of the UK tax system.

Well until tax credits and now CB.

nagynolonger · 22/03/2012 21:11

Way back in 1980 I remember the then chancellor geoffrey howe stating that a married woman should be able to transfer her tax allowance to her DH. I'm still waiting. Not enough votes in it.

pinktrees · 22/03/2012 21:18

I think this is unfair. Dh has a job which is long hours and also he has to go where he is told to when he is told to. It basically prevents me from working and I think it would be fair for him to be able to use my tax allowance.

amothersplaceisinthewrong · 22/03/2012 21:23

Independent taxation came in in 1988. One of the "downsides" is your allowance is yoru allowance and not transferable.

But it means if you work your income is not added to your husbands and taxed accordingly....

NapaCab · 22/03/2012 21:23

In the US, you can do this. DH gets a tax rebate because I'm not working at the moment and also because we have DS (5 months) so he is classed as having two 'dependents'. It effectively adds $1500 per month to his take-home pay.

The UK system is more of a flat-tax regime. Upside is you don't have to do a tax-return at the end of the year (unless you're self-employed or have some other non-PAYE income). Downside is, everyone is treated the same for tax-purposes regardless if you have a SAHM wife and 6 children or you're both child-free bankers earning 6 figures.

Original poster
Daffodilly · 22/03/2012 21:32

It is a big downside if one of you choses to stay at home and raise your family. I thought loads of gov research shows a stay at home parent is better for family life (if you have the luxury of that choice). Shame they don't support this.

We'd be financially better off if we each worked and earned half of what DH currently does. But I don't think DC would be better off at all.

OP posts:
suzikettles · 22/03/2012 21:34

Would you be better off (financially)? Depends on how much childcare would cost you.

suzikettles · 22/03/2012 21:36

I should imagine a lot of women would find themselves "trapped" at home if they brought in a transferable personal allowance.

Not only would your wage have to cover the cost of childcare, it'd also have to cover the cost of the loss of your personal allowance - potentially significant if your partner was a higher rate tax payer.

Maybe wouldn't matter to you, but it could affect a lot of women wanting to get a part time job.

Swings and roundabouts.

PullUpAPew · 22/03/2012 21:54

What has being married got to do with anything? Or do you think it is best for children to be looked after at home - in which case all families should surely be subsidised to make this affordable?

Given the lack of funds for people in dire need atm, I don't think giving your family an extra bung so you can stay home is going to get to the top of anyone's list.

I'm a SAHM too, I just feel really lucky that I had a choice. Never thought about my tax allowance - after all, I get my NHS, my kids get their education, my bins still get emptied even though I'm paying nothing in atm.

Original poster
Daffodilly · 22/03/2012 22:08

Thanks for the other perspectives, That is why I asked the question. You make a good point PullUpAPew about still getting benefit from state "services" despite the fact I'm not currently a tax payer.

I'm not trying to start a debate about marriage or looks after children at home. I was just stating our situation and my understanding.

OP posts:
vj32 · 22/03/2012 22:15

Married women used to not exist under law. We don't want to take a step back towards that kind of system.

If your dh is a higher rate tax payer has he spoken to an accountant about what he can do to minimise his tax? You could put any savings or investments in your name (outside of ISAs which are tax free anyway). Is he paying into a pension for you?

I don't think it is unfair. If you choose to be a SAHM you chose not to earn, so you don't get any money! Why should people who work subsidise your decision to stay at home? Most people can't afford to make that choice.

hugeheadofhair · 22/03/2012 22:20

Suzikettles made a good point. Being able to give your tax allowance to your partner may in a lot of cases persuade the lower earning partner to stay at home. Guess who that would be? Not good from a feminist point of view.

(I'm a sahm, but i'm glad this isn't subsidised in this country)

taffila · 22/03/2012 22:28

best thing as already said is to have the instant access saving in you name only - and sign the forms stating you are not a tax payer. you can earn about 9k interest tax free a year

Original poster
Daffodilly · 22/03/2012 22:31

Vj32 - Yes we put all savings accounts, etc in my name. Though that isn't much these days. He also pays a small amount into a stakeholder pension in my name. Not sure if there is any tax benefit to that, but makes me feel a bit better about the future while I am not earning for myself.

I see what you mean about Not earning so getting no money, but not sure I agree that anyone would be subsidising my decision to stay at home if I were able to "give" my tax free allowance to DH. We are a team. He is working (outside the home) for both of us. He works harder/longer hours to allow me to stay home and raise our children. It would be nice if some of that extra work that he is doing, on my behalf in a sense, could also using my tax allowance.

OP posts:
Original poster
Daffodilly · 22/03/2012 22:33

Wish we had the kind of savings that would earn 9k in interest! Grin

OP posts:
Jinsei · 22/03/2012 22:36

I understand where you're coming from, and can see the argument that the allowance should be transferable between spouses - though I disagree that having a SAHP is necessarily the ideal scenario.

On the other hand, most people incur additional costs when they go to work - eg commuting costs, childcare, smart clothes etc. So maybe the allowance helps to cover the cost of working?

DH and I would have benefitted from this arrangement in the past, as there have been periods in which he hasn't used his allowance, and I pay tax at the higher rate. However, I don't really think it's that unfair as it is at the moment.

PullUpAPew · 22/03/2012 22:40

I think this is where you have to be careful though about what is being said philosophically.

You are a team of two people. But your children are no more important than the children of single parents. And single parents by definition do not have the option of being in a team.

So if we subsidise your choice to be a SAHM, because the state thinks it is right for children to be cared for by a parent, shouldn't we then provide the necessary financial support for single parents to stay home as well?

It is a very tricky area, when the state starts financially subsidising personal choices. And IMO the decision to be a SAHP or WOHP, in the absence of financial drivers, is a personal parenting choice and is no business of the state.

scottishmummy · 22/03/2012 22:46

lol what research shows housewife good for family life
I'd have thought Tories and coalition favor work
it's your tax code not a transferable jolly for your husband

gaelicsheep · 22/03/2012 22:49

"Why should people who work subsidise your decision to stay at home? Most people can't afford to make that choice."

On other threads about the CB thing, people are claiming it is right for couples earning more than £50k between them to keep it because they are poorer, due to childcare costs, than the equivalent family with a single earner and a SAHP. So that being the case they can afford to make that choice - they can't have it both ways. Instead they have chosen to buy the bigger house that a double income affords them and thereby find themselves trapped into higher mortgage payments. And I suspect therein lies the crux of this.

WasabiTillyMinto · 22/03/2012 22:51

Transferable tax sounds dreadful. Suzikettles said it all.

scottishmummy · 22/03/2012 23:02

this is a whine that dh doesnt get a jolly
he'd work less maybe if op worked?

Original poster
Daffodilly · 22/03/2012 23:07

I think I must be missed something re: the "trapped at home" concept. In the scenario that I could give my tax free allowance to DH he could earn an additional 9k ish free of tax. If I then chose to return to work I could earn that £9k ish per year tax free. We wouldn't be worse off if I returned to work (child are costs aside, which are the same I either tax scenario).

Possibly I am just confused it is late for this level of concentration from a "housewife", which incidentally I don't see as being the same as being a SAHM.

OP posts:
Original poster
Daffodilly · 22/03/2012 23:08

Scottishmummy, xpost and WTF??

OP posts:
Original poster
Daffodilly · 22/03/2012 23:11

Seriously - what exactly does "doesn't get a jolly" even mean in this discussion?

OP posts:
scottishmummy · 22/03/2012 23:13

let me spell it out
you're saying boo hoo dh work loads. you don't
as result you think he should get your tax allowance essentially a £9k jolly
...why don't you work some?ease his burden,use your own tax allowance

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