What you need to know about Marriage Tax Allowance

If you are married or in a civil partnership you may be entitled to a tax break called the marriage tax allowance.

The marriage tax allowance is a way for couples to transfer a proportion of their personal tax-free allowance between them. Yet over one million couples are still missing out, so it is worth checking if you are eligible.

Are you eligible for Marriage Tax Allowance?

  1. You’re married or in a civil partnership (just living together doesn’t count)
  2. One of you needs to be a non-taxpayer, which usually just means earning less than the £11,850 personal allowance. The other partner needs to be a basic 20% rate taxpayer.
  3. You both must have been born on or after 6 April 1935 (if not you qualify for Married Couple’s Allowance a different benefit)
  4. You can claim even if your partner has died since April 2015
  5. You can backdate your claim to include any tax year since 5 April 2015 that you were eligible for Marriage Allowance.

How does it work?

The partner who has an unused amount of personal allowance can transfer £1,190 of their personal allowance to the other (so basically 10% of the full allowance). This reduces the other partner’s tax by up to £238 in the tax year (6 April to 5 April the next year).

How do you apply?

The non-tax payer needs to apply as they are transferring the allowance.

Fill in a simple application at HMRC. You will need both your national insurance numbers, and one of a range of different acceptable forms of ID for the non-taxpayer (you can also apply by calling HMRC).

In most cases, the allowance will be given by adjusting the recipient partner’s personal tax code. The partner who transferred their personal allowance will also receive a new tax code, if employed.

If the recipient partner is in self-assessment, it will reduce their self-assessment bill.

For more information please do not hesitate to contact us.

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