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bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 3825
Experience:  FCCA FCMA CGMA ACIS
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I am aged 80...2012 was granted a Judicial separation, encouraged

Customer Question

I am aged 80...2012 was granted a Judicial separation, encouraged by the court and subsequently ratified financial arrangements and Property allocation on more or less a 50/50
basis. I pay monthly maintenance of presently£739 rising as my private pension is Inf proofed. My wife has her own place in Northampton and I live in Bournemouth. both owner occupied.
My pension is the older defined benefits, with a surviving spouse clause, wife was nominated as the beneficiary at my retirement date, she is 10 yrs younger than I am, so will have a claim, but we must re main "married" for her to claim the widows benefit.
I however pay tax for us both, the deductions are from net income. I understand The Revenue will not allow us to be taxed separately. Any views on this arrangement. Ian
Submitted: 1 year ago.
Category: Tax
Expert:  bigduckontax replied 1 year ago.
Hello Ian, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question. The combined income of husband and wife being taxed as a single entity ended at the turn of the century if I recall. Since then, for Income Tax purposes, each spouse has their own tax account. The only change since then has been that for the 15/16 tax year one spouse can transfer up to GBP 1060 of their personal allowance to their other half. Your surmise that HMRC, the Inland Revenue was combined with HM Customs and Excise some years ago to form HMRC, will not allow separate taxation is misconceived. Widow's benefit only runs for a year now, but a widow or a widower may inherit part of your SERPS and vice versa. The one remaining problem you both have is with Capital Gains Tax (CGT). A married couple can only have one sole or main domestic residence between them for CGT purposes so problems could arise if both of you want to sell up as you only have one tranche of Private Residence Relief (PRR) between you. There is no CGT on death, all assets being aggregated and exposed to Inheritance Tax (IHT) which is levied at 40% (36% if charitable bequests exceed 10%) flat rate on all assets over 325K. The 325K is inflated by any inter spousal and charitable bequests. I do hope that my reply has cleared the air for you.

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