This very common question came up again recently.
Married couples (and indeed civil partners) have something slightly unusual about the way they are taxed. Ever since independent taxation was introduced (in the early nineties from memory!?) there has been a rule that states the income from jointly held property will always be taxed 50/50 across husband and wife unless a formal election is made.
This is of course different for those that are not married as they can choose the ration is which the income from an asset is taxed.
So how do married couples change this and what does the election look like? It is quite common to use something called a declaration of trust to change the allocation of the income, the capital or both. A solicitor should be used really as they are things other than tax that should be considered of course.
Once a declaration is made both taxpayers should notify HMRC via a Form 17. The effective date of change can be no longer than 60 days before the From 17 is received by HMRC so those wanting to change anything need to bare this in mind.
Why?
Good question. Well this is just part of the overall idea of tax planning that is generally called income equalisation. That is the goal to have both people in a couple paying the same rate of tax. After all why would someone be happy to pay 45% tax if their spouse is not paying any?