ANNEX 1:: MINOR CHANGES IN THE LAW MADE BY THE BILL This change is in taxpayers’ favour in principle. But it is expected to have no practical effect as it is in line with current practice.
Change 7: Personal reliefs: transfers between spouses or civil partners: sections 39, 47, 48, 49, 51, 52 and 53, Schedule 1 (sections 257BA, 257BB and 265 of ICTA) and Schedule 2Part 4 (personal reliefs)
This change removes the ability of spouses or civil partners to transfer blind person’s allowance or married couple’s allowance between them, in certain circumstances in which one or both of them is non-UK resident.
For those who are entitled to blind person’s allowance or married couple’s allowance immediately before the Act comes into force, the change does not have effect until the start of the 2009-10 tax year.
Section 278 of ICTA provides that the various personal reliefs provided for by Chapter 1 of Part 7 of ICTA are not available to individuals who are non-UK resident unless they fall within one of the categories in section 278(2)(a) to (e).
The entitlement to relief of non-UK residents who fall within the categories in section 278(2)(b) to (e) is dealt with in the Act, by virtue of section 56(3). The entitlement of non-UK residents who fall only within section 278(2)(a) (which concerns Commonwealth citizens and EEA nationals) continues to be dealt with in Chapter 1 of Part 7 of ICTA.
In the case of blind person’s allowance and married couple’s allowance, there is provision in Chapter 1 of Part 7 of ICTA for the transfer of part of the allowance between spouses and civil partners in certain circumstances.
It will continue to be possible for these allowances to be transferred between spouses or civil partners, if both individuals qualify under section 56 or both qualify under section 278(2)(a). But it will no longer be possible for these allowances to be transferred from one spouse or civil partner to the other if one of them qualifies under section 56 and the other qualifies under section 278(2)(a).
This change is necessary to ensure that the provisions of the Act are fully compatible with the provisions of the Human Rights Act 1998. See the overview commentary on Part 3 of the Act and the explanation concerning the European Convention on Human Rights towards the end of the Explanatory Notes.