Taxation: Personal Allowance

House of Lords written question – answered on 6th April 2010.

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Photo of Baroness Massey of Darwen Baroness Massey of Darwen Labour

To ask Her Majesty's Government what is the cost of providing a transferable income tax personal allowance for all married couples with children under three.

To ask Her Majesty's Government what percentage of (a) married couples, (b) families, and (c) all people, would benefit from providing a transferable income tax personal allowance for all married couples with children under three.

Photo of Lord Myners Lord Myners Parliamentary Secretary, HM Treasury

Due to the complex nature of these questions the following estimates should be treated with caution. These estimates exclude any behavioural response to the change, which could be significant given the magnitude of the change.

The estimated cost in 2010-11 of allowing the personal tax allowances of married couples with children under three to be transferable would be £0.6 billion.

The percentage of families and individuals benefiting, for the following groups, would be:

5 per cent of all married couples;

2 per cent of all families; and

2 per cent of all people.

These estimates have been calculated using HM Treasury's tax and benefit micro-simulation model using Family Resources Survey 2007-08 data.

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