If you are Married and your Husband, Wife or Civil Partner earn below the personal allowance tax threshold, you may be able to claim the Marriage Allowance to transfer part of their Personal Allowance to you – Increasing your tax free earnings and the threshold at which you will begin to pay tax.
The Marriage Allowance lets you transfer £1,260 of your Personal Allowance to your Husband, Wife or Civil Partner.
This reduces their tax by up to £252 in the tax year (6 April to 5 April the next year).
To benefit as a couple, the lower earner must normally have an income below the annual Personal Allowance – this is usually £12,570.
When you transfer some of your Personal Allowance to your Husband, Wife or Civil Partner you might have to pay more tax yourself, but you could still pay less as a couple.
You can benefit from Marriage Allowance if all the following apply:
- you’re married or in a civil partnership
- you do not pay Income Tax or your income is below your Personal Allowance (usually £12,570)
- your partner pays Income Tax at the basic rate, which usually means their income is between £12,571 and £50,270 before they receive Marriage Allowance
You cannot claim Marriage Allowance if you’re living together but you’re not married or in a civil partnership.
It will not affect your application for Marriage Allowance if you or your partner:
- are currently receiving a pension
- live abroad – as long as you get a Personal Allowance
If you or your partner were born before 6 April 1935, you might benefit more as a couple by applying for Married Couple’s Allowance instead.
Backdating your claim
You can backdate your claim to include any tax year since 5 April 2019 that you were eligible for Marriage Allowance.
Your partner’s tax bill will be reduced depending on the Personal Allowance rate for the years you’re backdating.
How to apply
You can apply for Marriage Allowance online. It’s free to apply.
If both of you have no income other than your wages, then the person who earns the least should make the claim.
If either of you gets other income, such as dividends or savings, you may need to work out who should claim. You can call our Accountant’s in Derby or Ripley.
Changes to your Personal Allowances will be backdated to the start of the tax year (6 April) if your application is successful.
Other ways to apply
If you cannot apply online, you can apply:
- through Self Assessment if you’re already registered and send tax returns
- by filling in Marriage Allowance form MATCF and sending it to the address on the form
How your Personal Allowances change
HM Revenue and Customs (HMRC) will give your partner the allowance you have transferred to them either:
- by changing their tax code – this can take up to 2 months
- when they send their Self Assessment tax return
If your new Personal Allowance is lower than your income after you’ve made a claim, you might have to pay some income tax. However, you might still benefit as a couple.
How your tax code will change
You and your partner will get new tax codes that reflect the transferred allowance. Your tax code will end with:
- ‘M’ if you are receiving the allowance
- ‘N’ if you are transferring the allowance
Your tax code will also change if you’re employed or get a pension.
If you need guidance or advice, contact our Accountants in Derby on 01332 981920 or Ripley on 01773 424009 or Info@ascentant.co.uk for assistance.