Income Tax Act 2007 section 55A

Tax reduction under Chapter

Section 55A introduces the Chapter dealing with the transferable tax allowance for married couples and civil partners, and explains how the resulting tax reduction is applied within the income tax calculation.

• Where one spouse or civil partner elects to reduce their personal allowance, the other spouse or civil partner may be entitled to a corresponding tax reduction.
• The tax reduction is applied at Step 6 of the income tax calculation set out in section 23, meaning it operates as a deduction from the recipient's income tax liability rather than a reduction in taxable income.
• For tax years before 2025-26, individuals who claim the remittance basis under section 809G lose entitlement to this tax reduction for that year.
• For tax years from 2025-26 onwards, individuals who make a foreign income claim, a foreign employment election or a foreign gain claim under section 845E of ITTOIA 2005 are similarly not entitled to any tax reduction under this Chapter for that year.