Marriage Allowance

Posted 25/06/2019

If you are married or in a civil partnership you can see if you are available to claim the marriage allowance; one of the partners must earn less than £11,850 and the other partner must earn less than £46,350 (£43,430 in Scotland) between 6th April 2018 – 5th April 2019.
Between the 6th April 2019 – 5th April 2020 one partner must earn less than £12,500 and the other partner must earn less than £50,000 (this remains at £43,430 in Scotland).

This allowance transfers 10% of the lower earner’s personal allowance and adds it to the higher earner’s personal allowance; this can reduce the amount of tax that the higher earner is due to pay to HMRC. For the 2018/19 tax year, 20% of £1,185 would have saved married people up to £237 in tax. The saving on the 2019/20 tax year allowance transfer of £1,250 will save married couples up to £250. If the lower earner received between £10,665 - £11,850 in the 2018/19 tax year and receives between £11,250 - £12,500 in the 2019/20 tax year then the tax saved will decrease as not all 10% of the personal allowance would be unused and ready to transfer to the partner.The allowance can be applied for on HMRC’s website; they will run through and check that your and your partner match the criteria before asking a few security questions, such as your National Insurance number, to check who you are and to confirm earnings. If you already prepare a self-assessment tax return each year for HMRC then you can complete this section on the form and this will put your application in for you, or alternatively complete a Form 575 and send that to HMRC. You would need to be aware that HMRC can review your case and send a letter to you to inform you if they reject the marriage allowance.

It is possible to transfer your allowance to your partner before the tax year (6th April) begins if you know that your income will be below the personal allowance. To do this, you would need to complete a Form 18 and post it to HMRC – the form is downloadable from HMRC. As the 2019/20 tax year has already started, you would only be able to apply for the to start from the 6th April 2020.This allowance is only for married couples where the partners were born after 6th April 1935. For couples were at least one person was born before this date then they could need to look to apply for the Married Couple’s Allowance. The amount of allowance by this method varies depending on income figures, but it could lead to a greater tax saving than the marriage allowance.

Tags: marriage allowance, personal tax, tax returns


Need help?

Get in touch and see how we can help you