To ask Her Majesty's Government what is the most recent estimate of the cost of making the personal allowance transferable between couples with children under the age of six for each of the next five years. [HL146]

To ask Her Majesty's Government what is the most recent estimate of the total financial effect of making the personal allowance transferable between couples with children under the age of six for each of the next five years by income decile. [HL147]

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.

HM Revenue and Customs (HMRC) estimates that the cost of making the personal allowance transferable between married couples and civil partners with children under the age of six would be £960 million for 2009-10.

Information on average gains by income decile of all UK households as a result of making personal allowances transferable between married couples and those in civil partnerships with children under the age of six in 2009-10 are shown in the table below:

These estimates have been calculated from HM Treasury's tax and benefit static micro-simulation model using Family Resources Survey 2007-08 data uprated to 2009-10 levels of prices and earnings. The model does not take into account behavioural changes in response to changes to the tax and benefit system or economic conditions so if the model was used to produce the financial effect for five years, it would show similar results for each year.

To ask Her Majesty's Government what is the most recent estimate of the proportion of (a) individuals who are married, (b) individuals who are married with dependent children, and (c) the working age adult population, who would benefit from a transferable personal tax allowance between married couples for each of the next five years. [HL148]

Due to the complex nature of this Question, 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.

The most recent estimate available of the proportion of individuals who are married or in civil partnerships that would benefit from a transferable personal tax allowance is 41 per cent. For those who are married or in civil partnerships with children the estimated proportion of beneficiaries would be 44 per cent, and for the working age adult population as a whole the estimate is 22 per cent.

These estimates have been calculated from HM Treasury’s tax and benefit static micro-simulation model using Family Resources Survey 2007-08 data uprated to 2009-10 levels of prices and earnings. The model does not take into account behavioural changes in response to changes to the tax and benefit system or economic conditions so if the model was used to produce the financial effect for five years, it would show similar results for each year.