Happy Valentine's Day.
The UK population is apparently looking to spend up to £713mn this year with most of the money1 going on dinners (£223mn), jewellery (£77mn), flowers (£69mn), cards (£52mn) and chocolates (£42mn). And of course even more money will be spent by singles avoiding the celebrations and those tedious 'lovey-dovey' couples.
But while many gifts will (of course) have been bought with some thought, 7IM believes that there are a number of financial gifts that you can consider giving your spouse that will still be giving in a fortnight’s time and may even save you money!
And if you’re not married or in a civil partnership, that might be about to change! The same Valentine’s Day study found that 10% of proposals in the UK are made on Valentine’s Day, while 22% of women think the day is the best time to get down on one knee.
Seven Investment Management (7IM) doesn’t give tax advice, but we thought some of these common sense suggestions could prompt you to get some proper advice and not be scrabbling around for a last-minute present today.
So here’s our starter for 7:
- Charitable donations
While the craze to give a goat has probably had its day, you could consider a gift to your loved one’s charity of choice. Not only does this make a difference to the charity’s beneficiaries (especially if you check the gift aid box), but you can also offset that donation against tax if it’s a registered charity and you’re a high rate tax payer. For more information, click here.
Income tax allowance
A couple of years ago, the government extended some of the marriage allowance benefits beyond those born before 1935. It lets you transfer up to £1,100 of your personal income tax allowance to your spouse if they earn more than you do. This could mean you could reduce their tax bill by £220 in the 2015/16 tax year and up to £432 if you backdate the claim to April 2015. There is (of course) some attendant small print, but
click here to find out more.
Contribute to your partner’s pension pot
This is particularly useful if your spouse doesn’t earn anything, but you have used up your own pension allowances. If you’re already retired, you can transfer money into a spouse’s pension fund without paying tax and benefit from any of their unused tax allowances as the scheme pays out. Both of these options should be talked through with a professional planner as there are always complexities when transferring between schemes.
Capital gains tax
Special allowances apply regarding capital gains tax and any gifts or investments you give to your spouse. Again there are some rules attached, but it’s probably worth finding out more by clicking here.
Contribution to an emergency fund
This doesn’t necessarily result in any immediate benefits, but it’s always worth thinking through what your cash reserves need to be and if necessary topping them up. For some people, it could cover three months of expenditure, others might want income for up to a year, while other people want to keep a round number…everyone’s different.
Lower your car insurance bill
With multiple car households a common occurrence today, insurance bills are automatically lower as the insurance companies recognise that each car is probably doing fewer trips than if you only used the one car. Did you check that box on the form?
Ensure you’re in a Seven Investment Management family fee group
7IM allow our clients who are members of the same family to invest in separate accounts (so you can’t see what each other is holding or any financial details) but be banded together in the same fee bracket. So as you invest over £1mn with us (actually easier than you think if there’s a couple of generations involved), we cap your fees.
At least if you consider these suggestions, you may not be labelled as a soppy romantic after all!
Justin Urquhart Stewart
Co-founder and Head of Corporate Development
1 eHarmony 2017 Valentine’s Study
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