Reader’s Question: Invalidity Benefit and my unused income tax personal allowance

Reader's Question:

I have been on Invalidity Benefit since 1993 which is a non taxable benefit as I've been on it for so long.

I'm a non taxpayer so can I give my husband some of my tax allowance?

My response:

For the benefit of other readers Invalidity Benefit, which was later superseded by Incapacity Benefit in April 1995 which in turn was closed to new applicants from 31^st January 2011, is a state benefit awarded to those unable to work due to illness or disability.

Although Invalidity Benefit was replaced by Incapacity Benefit in 1995 existing claimants continued to receive Invalidity Benefit. One advantage of this is that Invalidity Benefit is a non-taxable benefit while Incapacity is taxable in certain circumstances.

Now as you state, you have an income tax personal allowance which you are not utilising, but unfortunately you can't simply give it to your husband to use. But it is still possible to arrange your affairs more tax efficiently so that you start using your personal allowance, which could cut your tax bill as a couple. For full details read my article Reader’s Question – Utilising a spouse’s tax allowances.

One thing I will add, utilising your income tax allowance will involve moving income generating assets into your name. Now while I don't see why this would affect your entitlement to Invalidity Benefit I would still run any proposed changes to your circumstances past the Department for Work and Pension or the Citizen's Advice Bureau who can advise you on this point in particular.

Hope that helps

Best wishes

Damo

The material in any email, the Money to the Masses website, associated pages / channels / accounts and any other correspondence are for general information only and do not constitute investment, tax, legal or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Always obtain independent, professional advice for your own particular situation. See full Terms & Conditions and Privacy Policy.

Image: Danilo Rizzuti / FreeDigitalPhotos.net