Tax efficiency doesn’t have to be complicated, says Rosie Murray-West in The Daily Telegraph. Independent research by Rathbones suggests that a couple investing £500,000 in 2001 and planning their taxes properly could have made £70,000 more in net returns since then than a couple who did not.
The biggest lift comes from using the Isa allowances of both spouses, but a big benefit of being married is the ability to transfer assets from one spouse to the other without it being treated as a disposal for the purposes of capital gains (CGT) or inheritance tax. Through the CGT exemption (now £10,600), you can crystallise some gains each year without paying any tax.
But you must remember to use it. If the wife had used her CGT allowance only in the final year of the investment and hadn’t transferred any investments (which she is holding because she is on a lower rate of income tax) to her husband, she would have paid a total of £50,519 in CGT after ten years. If, however, they had both used their CGT allowance each year, the bill would have been £18,983 by the end of the period.