What is the Marriage Allowance and who can get it?
You can receive or transfer 10’% of your tax free allowance to or from your spouse or civil partner each tax year to save tax.
To benefit as a couple, you must be married or in a civil partnership, living together doesn’t count. One of you needs to be a basic rate 20% tax payer. Higher 40% and additional rate 45% tax payers are not eligible for this allowance.
You can backdate your claim 4 years to include any tax year since 6 April 2015 that you were eligible for Marriage Allowance.
Example based on the tax year ending 5th April 2018
David has been working as a dental nurse earning £18,000 and studying to become a dentist. David pays income tax at the basic rate tax band of 20% on his earnings above £11,500. His wife Daisy doesn’t work and looks after their three-year old son Duncan.
As David is a basic rate tax payer, Daisy elects to transfer 10% of her £11,500 tax free allowance to David. Daisy’s allowance is now reduced from £11,500 to £10,350. As a result, Daisy still pays no tax and David pays £230 (£1,150 @ 20%) less tax.
As Daisy hasn’t worked since 2015 and David has worked and payed tax in the since 2015 the allowance transfer can be backdated to 2015. This results in a further £432 tax saving to David.
You can make a claim online at https://www.gov.uk/apply-marriage-allowance