Leap year proposals: Ladies planning to pop the question this 29 February could be counting their luck with extra tax savings

 
Hayley Kirton
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Man looking at woman's ring
From marriage allowance to inheritance tax-free wedding gifts, here's how marriage can benefit your bank balance (Source: Getty)

Call us old romantics but we here at City A.M. love a good wedding story – the beautiful frocks, the first dance as a married couple, all those wonderful tax breaks the newlyweds can take advantage of...

The tax experts at the Institute of Chartered Accountants in England and Wales (ICAEW) are clearly in agreement, as they've provided the details of some incentives ladies can enjoy if they plan to take advantage of Irish tradition and propose this leap year.

First of all, there's the aptly named marriage allowance, which lets married couples or those in a civil partnership transfer a chunk of their personal allowance to reduce the higher earner's tax bill.

Couples can transfer £1,060, netting a tax saving of £212. However, to be eligible, the lower-paid partner must be bringing home less than their personal allowance, which is currently £10,600, and the higher-paid partner must be taxed at basic rate.

If it's the tax on your assets rather than your income that keeps you up at night, then you might be pleased to learn that you can pass property that would otherwise attract capital gains tax to your beloved without paying a penny in taxes.

Clever use of the exemption means that married couples can essentially access a tax-free allowance on capital gains of £22,200, as opposed to the £11,100 they would have as individuals.

Read more: Women more likely than men to put all their Isa savings in cash

Unfortunately, these exemptions only kick in once you've made your way down the aisle, and weddings can set couples back tens of thousands of pounds.

But we're sure your friends and family will be pleased to find out that they can contribute to the cost of your nuptials without getting hit by inheritance tax. Each parent can gift up to £5,000, each grandparent up to £2,500 and everybody else up to £1,000 without getting a bill from the taxman, provided the gift is given either on or shortly before the date of the ceremony.

However, ladies, if your loved one doesn't feel overcome enough by these thrifty tips to accept your proposal this year, fear not: Anita Monteith, technical tax manager at the ICAEW, has found another solution hidden in tradition.

"Any man refusing a 29 February proposal should buy the woman in question a silk dress, or some traditions even dictate that he should buy her 12 pairs of gloves – the intention being to hide the embarrassment of having no engagement ring," she points out.

See – who said romance was dead?

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