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 of 20% taxpayer. Higher 40% and an additional rate of 45% taxpayers are not eligible for this allowance.
How much can the Marriage Allowance save me?
To get the full benefit one of you needs to pay tax and the other not.
You can backdate your claim 4 years to include any tax year since 6 April 2016 that you were eligible for Marriage Allowance. Backdated claims are repaid as a cheque and current tax year claims adjusted in PAYE tax codes or if not employed when you file your tax return and prepare your tax calculation.
This can result in the couples being able to make the following tax savings, totaling up to £1,188:
- 2020/21 tax year: the personal allowance was £12,500, meaning £1,250 (rounded up) can be transferred (maximum £250 tax saving)
- 2019/20 tax year: the personal allowance was £12,500, meaning £1,250 (rounded up) can be transferred (maximum £250 tax saving).
- 2018/19 tax year: the personal allowance was £11,850, meaning £1,190 (rounded up) can be transferred (maximum £238 tax saving).
- 2017/18 tax year: the personal allowance was £11,500, meaning £1,150 can be transferred (maximum £230 tax saving).
- 2016/17 tax year: the personal allowance was £11,000, meaning £1,100 can be transferred (maximum £220 tax saving).
How can I claim my Marriage Allowance?
You can make a claim:-
- Online at https://www.gov.uk/apply-marriage-allowance
- Telephone HMRC on 0300 200 3300
- Write to them Pay As You Earn and Self Assessment, HM Revenue and Customs, BX9 1AS
- Or if you complete a self-assessment tax return claim on the return
Example based on the tax year ending 5th April 2021
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 £12,500. His wife Daisy doesn’t work and looks after their three-year-old son Duncan.
As David is a basic rate taxpayer, Daisy elects to transfer 10% of her £12,500 tax-free allowance to David. Daisy’s allowance reduces from £12,500 to £11,250. Daisy will still pay no tax and David will pay £250 (£1,250 @ 20%) less tax.
As Daisy hasn’t worked since 2016, David can backdate the transfer to 2016 resulting in a further £938 tax saving to David.