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Marriage Allowance – sharing the love

Andrew Laurie 037v3
8 January 2020

Marriage Allowance – sharing the love

By Andrew Laurie, tax manager

As Valentine’s Day approaches don’t miss out on a tax break. Be sure to say I do… to the Marriage Allowance.

It’s estimated that 700,000 couples eligible for the relief worth up to £250 a year have not claimed it.

Married couples who haven’t yet signed up for the scheme could get back-dated allowances paid as a lump sum, provided they meet the criteria.

So with love being in the air, and thoughts turn to your significant other, be sure to join the 3.5 million plus couples that are already benefiting from the relief since it was introduced in April 2015.

It’s a great scheme, and this basic guide will tell you more.

What is Marriage Allowance?

Couples who are married and those in civil partnerships can transfer up to £1,250 of personal allowance to their partner for 2019/20.

The allowance allows lower income workers transfer their allowance to their husband, wife or civil partner, if their income is higher. This reduces their tax by up to £250 a year.

Who qualifies?

Marriage Allowance is for those who:

  • are married or in a civil partnership
  • don’t earn anything or have total income below the Personal Allowance – currently £12,500
  • has a partner who pays tax at the basic or intermediate rate of tax (in Scotland, for most this means between £12,501 and £43,430).

Anything else?

It’s good to know that your claim can be backdated to include any tax year since 5 April 2015 that you were eligible for Marriage Allowance.

There is no need to reapply for marriage allowance every year because it is automatically renewed. However, couples should notify HMRC if their circumstances change and they want to cancel it.

If your partner has died since 5 April 2015 you can still claim, and the best advice is to call Income Tax helpline for advice.  If your partner was the lower earner, the person responsible for managing their tax affairs should call.

In addition, it won’t affect your application for Marriage Allowance if you or your partner are currently receiving a pension or live abroad, provided you get a Personal Allowance.

How do I claim?

It’s simple and takes just a few minutes online at HMRC, supplying National Insurance numbers and relevant identification. The person with the lowest earnings should make the claim.

The helpline number is 0300 200 3300.

Is Marriage Allowance and Married Couple’s Allowance the same thing?

No. Instead of the Marriage Allowance, couples where one or both partners are born before 6 April 1935 may be able to claim the more generous Married Couple’s Allowance.

In marriages before 5 December 2005, the husband’s income is used to work out Married Couple’s Allowance although it can be transferred to the wife. For marriage and civil partnerships after this time, it is the income of the highest earner.

Tax relief for the Married Couple’s Allowance is 10%. This means that the higher earning partner gets 10% of the tax they pay.

The benefit has upper and lower limits for both the amount of tax that can be claimed and how much can be earned.

For the 2019 to 2020 tax year, it could reduce a tax bill between £345 and £891.50 a year.

The easiest way to check how much will be awarded is to use the calculator on the website.

With the financial benefits that can be derived, what’s not to love about Marriage Allowance and Married Couple’s Allowance? Contact us if you require any additional information.

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