PM's plan allows transfer of tax-free allowance

Clare and Chris are a married couple. Chris works full-time and earns £25,000 a year, while Clare works three days a week and earns £9,000 a year.

By 2015-16 they would both be expected to have a tax-free allowance of £10,200.

They go online and register for the new marriage tax allowance. Clare transfers £1,000 of her allowance to Chris.

In 2015-16, this means Chris now has a tax-free allowance of £11,200, while Clare’s is £9,200 – and saves the couple £200 a year.