Part 3

Personal reliefs
CHAPTER 3A

Transferable tax allowance for married couples and civil partners

Election to reduce personal allowance

Election to reduce personal allowance
55C
1
An individual may make an election for the purposes of section 55B if—
a
the individual is married to, or in a civil partnership with, the same person
(“the gaining party”)
—
i
for the whole or part of the tax year concerned, and
ii
when the election is made
or, where the election is made after the death of one or each of them, when they were last both living
,
b
the individual is entitled to a personal allowance under section 35
... for that tax year,
c
assuming the individual's personal allowance was reduced as set out in section 55B(6), the individual would not for that year be liable to tax at a rate other than the basic rate,
the default basic rate, the savings basic rate,
the dividend nil rate,
the Scottish basic rate,
a Scottish rate below the Scottish basic rate, the Scottish intermediate rate,
the Welsh basic rate,
the dividend ordinary rate
, the savings nil rate
or the starting rate for savings,
ca
where on that assumption the individual would for the tax year be liable to tax at the dividend nil rate, the individual on that assumption would for that year neither be liable to tax at the dividend upper rate, nor be liable to tax at the dividend additional rate, if section 13A (dividend nil rate) were omitted,
and
d
where the individual meets the requirements of section 56 (residence) for the tax year by reason of meeting the condition in subsection (3) of that section, the individual meets the condition in subsection (2) of this section.
2
The condition is that the individual's hypothetical net income for the tax year concerned is less than the amount of the personal allowance to which the individual is entitled for that tax year under section 35 ....
3
For the purposes of subsection (2), an individual's “hypothetical net income” is the amount that would be that individual's net income calculated at Step 2 of section 23 if that individual's income tax liability were calculated on the basis that the individual—
a
was
UK
resident for the tax year concerned (and the year was not a split year),
b
was
not a qualifying new resident
for that tax year,
c
in that tax year, did not fall to be regarded as resident in a country outside the United Kingdom for the purposes of double taxation arrangements having effect at the time, and
d
for that tax year, had made a claim for any available relief under section 6 of TIOPA 2010 (as required by subsection (6) of that section).
4
An individual's hypothetical net income for a tax year is, to the extent that it is not sterling, to be calculated by reference to the average exchange rate for the year ending on 31 March in the tax year concerned.
5
The personal representatives of an individual may make any election for the purposes of section 55B that the individual (if living) might make in relation to—
a
the tax year in which the individual dies, or
b
an earlier tax year.
S. 55C(1)(ca) inserted (with effect for the tax year 2016-17 and subsequent years) by Finance Act 2016 (c. 24), s. 5(7)(b)(10)
Words in s. 55C(1)(c) inserted (with effect in accordance with art. 1(2) of the amending S.I.) by The Scottish Rate of Income Tax (Consequential Amendments) Order 2015 (S.I. 2015/1810), arts. 1(1), 14(4)
Words in s. 55C(1)(c) inserted (with effect for the tax year 2016-17 and subsequent years) by Finance Act 2016 (c. 24), s. 5(7)(a)(10)
Pt. 3 Ch. 3A inserted (with effect in accordance with s. 11(12) of the amending Act) by Finance Act 2014 (c. 26), s. 11(2)
Words in s. 55C(1)(c) inserted (with effect for the tax year 2016-17 and subsequent years) by Finance Act 2016 (c. 24), s. 4(8)(17)
S. 55C(5) inserted (retrospective and with effect in accordance with s. 6(12)(b)(c) of the amending Act) by Finance Act 2018 (c. 3), s. 6(8)(12)(a)
Words in s. 55C(1)(b) omitted (with effect in accordance with s. 5(11) of the amending Act) by virtue of Finance Act 2015 (c. 11), s. 5(9)
Words in s. 55C(1)(c) inserted (6.4.2018) by The Scottish Rates of Income Tax (Consequential Amendments) Order 2018 (S.I. 2018/459), arts. 1(2), 6(2)
Words in s. 55C(1)(c) inserted (with effect in accordance with art. 1(2) of the amending S.I.) by The Devolved Income Tax Rates (Consequential Amendments) Order 2019 (S.I. 2019/201), arts. 1(1), 12(7)
Words in s. 55C(3)(b) substituted (for the tax year 2025-26 and subsequent tax years) by Finance Act 2025 (c. 8), s. 40(4), Sch. 9 para. 8
Words in s. 55C(2) omitted (with effect in accordance with s. 5(11) of the amending Act) by virtue of Finance Act 2015 (c. 11), s. 5(9)
Words in s. 55C(1)(a)(ii) inserted (retrospective and with effect in accordance with s. 6(12)(b)(c) of the amending Act) by Finance Act 2018 (c. 3), s. 6(7)(b)(12)(a)
Words in s. 55C(1)(a) inserted (retrospective and with effect in accordance with s. 6(12)(b)(c) of the amending Act) by Finance Act 2018 (c. 3), s. 6(7)(a)(12)(a)
Words in s. 55B(3) inserted (30.11.2016) (with effect in relation to tax year 2017-18 and subsequent tax years) by Finance Act 2016 (c. 24), s. 6(16)(24); S.I. 2016/1161, regs. 2, 3