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Newsletter issue – October 2025
Q: My husband has been out of work for a year, so his income has dropped below the Personal Allowance. Is it correct that I can now qualify for the Marriage Allowance?
A: To be eligible for the Marriage Allowance, one partner (in the marriage or civil partnership) must not be paying any income tax, and the other must be a basic rate taxpayer.
The lower earner can transfer £1,260 of their Personal Allowance to the higher earner, reducing the latter's tax bill by £252 (20% of £1,260). This can be done via a self-assessment tax return (if you are already registered) or online on the GOV.UK website.
Q: I'm thinking of going freelance but am unsure of how to account and save for any tax I might have to pay. Can you give any advice?
A: Going freelance can be rewarding, but it does come with risks and pitfalls you should make yourself aware of. Make sure you have a solid financial plan and are realistic about your expected level of income.
If you think you'll earn at least £50,000 per year, you will need to be compliant with Making Tax Digital from next April (see earlier article in this newsletter). If you think your turnover will reach above £90,000 you will also have to register for VAT. Keeping up-to-date financial records using HMRC approved MTD software will help you calculate your VAT obligations.
Regarding your personal tax to be paid, as a rule of thumb you should aim to set aside 40% of the net value of your invoices received from customers. This will cover you for tax, national insurance and possibly a pension contribution.
Please get in touch with us if you would like to discuss your business plans in detail and get further tax planning advice.
Q: We've sold inherited assets at less than the estate valued them at but have already paid the Inheritance tax (IHT) based on the higher valuation. Is there anything we can do?
A: Yes, there is. There are an increasing number of cases of families successfully reclaiming overpaid IHT, but many are unaware that they can even do this.
Based on your question, I believe you've paid IHT within the six months deadline but have sold some assets later. If those assets, such as property or stocks and shares, have fallen in value since the initial valuation, then you may be able to reclaim the overpayment in IHT.
The executors of the estate should submit the relevant forms to HMRC upon disposal of the asset. For example, form IHT35 is used for qualifying investments sold within 12 months of death and IHT38 for property sold within four years.
