Joe Brough considers how spouses and civil partners can be introduced into a business and tax traps to be aware of.
When maximising the tax efficiency of married couples (or couples in a civil partnership), one consideration should be whether both spouses’ tax allowances are being fully utilised. Where there are unused personal allowances, or one spouse pays tax at a lower marginal rate, bringing a spouse into a business can provide access to tax efficiencies.
In the context of this article, spouse can also be taken to include ‘civil partner’.
Creating a partnership
A spouse can be introduced into a sole trade business by creating a partnership. One advantage of a partnership structure is that profits and losses can be allocated how the partners choose. This means that where one partner takes little or no part in the day-to-day
