From: "Sam Smith" 
Newsgroups: uk.finance
Subject: Re: Use Partner's Income Tax Allowance for Earnings?
Date: Wed, 19 Oct 2005 10:25:30 +0100

"Andy Pandy"  wrote in message 
news:3rl9l6FjliolU1@individual.net...
>
> No. However if there is genuinely something the stranger, or your wife, 
> could do
> to assist you in your work (eg admin work) then you could employ them and 
> claim
> their salary as an expense. If it's your wife the IR may well ask for 
> proof that
> she is genuinely doing work worth what she is being paid.
>

I'm pretty sure that's nonsense. If you owned your own limited company and 
your wife was a share holder then you could indeed pay them a dividend or a 
wage even if they were not directly working for your company. For example, 
if I had a company which pays tax and decides to employ someone (who also 
pays tax on that profit if it's over the threshold for themselves) then they 
could just as legally be sat at home all day as it's my business who I 
decide to employ and pay. I'm sure you could argue that your wife helps in 
some way anyway even if things did some down to that.

However as no-one here seems 100% certain then I would check with your 
accountant. I am 99.9% certain you can use your wife's tax allowance in the 
way you describe.