Are you eligible for Marriage Allowance?

No one likes to pay too much tax, so it is surprising that many people are not taking advantage of an important new tax break.

Marriage Allowance is a tax concession that can save married couples, or those in civil partnerships, up to £220 each year in tax.

HMRC estimates that around 4.2 million couples are eligible. But, less than a million are actually claiming it, despite a high-profile advertising campaign.

Are you missing out?

Marriage Allowance was introduced in 6th April 2016. It allows non-taxpayers to transfer £1,100 of their personal allowance to their spouse or civil partner.

This in turn saves £220 in tax in the 2016/17 tax-year.

If you are eligible, you may also be able to backdate a claim for 2015/16, if you met the eligibility criteria then too.

The total saving, over the two years, could therefore be £432.

Can you claim?

You can claim Marriage Tax Allowance if:

  • You’re married or in a civil partnership
  • The lower earner has an income under £11,000
  • Their partner’s income is between £11,001 and £43,000

How it works

If you have income of less than £11,000 in the current tax year, you are not using your full personal allowance; the amount you can earn before you start to pay tax. Marriage Allowance allows you to transfer £1,100 of this unused allowance to your partner.

The personal allowance of the person making the transfer is reduced by £1,100 and the allowance of the person receiving the transfer increased by the same amount. As a result, the higher earning partner will pay less income tax, saving the couple from £220 of tax in the current year.

Marriage Allowance applies even for people receiving a state pension or living abroad provided they get a personal allowance.

Backdating a claim

The savings may be even more generous.

Marriage Allowance was introduced in the 2015/16 tax year, if you qualified in the previous tax-year, but claim the allowance, it can be backdated; saving a further £212.

How to apply

HMRC has an online calculator, which can help show just what you may be able to claim.

It should only be necessary to claim once. When a claim has been approved, the allowance will be transferred automatically each tax year although HMRC must be informed of any changes of circumstances, including:

  • Changes of income
  • Divorce proceedings or dissolution of civil partnerships
  • The death of either partner

If you were to divorce, your marriage allowance should continue to the end of the tax year, or you can back date to the start of the current tax year.

There are three ways for the non-taxpayer who is transferring the allowance to apply:

  1. Online, at HM Revenue & Customs (HMRC).
  2. By calling 0300 200 3300
  3. Or by writing to HMRC

To claim, you will need both your National Insurance numbers.

Please note

Tax advice is not regulated by the Financial Conduct Authority.