To ask the Chancellor of the Exchequer (1) if he will estimate the cost to the Exchequer in each financial year from 2010-11 to 2013-14 of introducing a transferable personal allowance, limited to the basic rate of income tax, for all married couples and couples in civil partnerships with children under the age of six; (312934)

[holding answers 25 and 28 February 2010]: Due to the complex nature of these questions the following estimates should be treated with caution. These estimates exclude any behavioural response to the change, which could be significant given the magnitude of the change. This has the additional implication of limiting reliable modelling of costs to 2010-11.

The estimated cost in 2010-11 of allowing personal tax allowances to be transferable, limited to the basic rate of income tax, for the specified groups would be:

£0.6 billion for all couples with children under the age of three;

£1.0 billion for all couples with children under the age of six;

£0.5 billion for all married couples and couples in civil partnerships with children under the age of three;

£0.8 billion for all married couples and couples in civil partnerships with children under the age of six;

£4.2 billion for all married couples and couples in civil partnerships.

These estimates have been calculated using HM Treasury's tax and benefit micro-simulation model using Family Resources survey 2007-08 data.