What is marriage allowance
Our three-minute guide to explain the must-knows around this Government scheme for “I-do”ers.
Here’s our three-minute guide to explain the must-knows when it comes to this Government scheme – and what it could mean for you and your better half.
You might have heard a thing or two about marriage allowance. It’s a way for married couples or those in a civil partnership to trim a little off their tax bill. So how does it work?
Marriage is all about sharing – that could include your tax-free allowance
Marriage allowance allows one spouse to transfer £1,260 of their personal allowance to the other, if they meet the conditions.
The potential tax saving is £1,260 at 20%, which is £252.
Meet all four of these? You’ve got the green light to apply
- You’re married or in civil partnership
- Either you or your other half earn below the personal allowance (meaning they don’t pay tax on their income)
- Your partner pays income tax at the basic rate if you’re in England or Wales, or starter, basic or intermediate rate in Scotland
Marriage allowance could be worth giving a closer look if you are on maternity leave, stay-at-home parents, retired, self-employed and unemployed, and your spouse is not a higher or additional rate taxpayer.
To apply for the marriage allowance, go to the government website.
The non-taxpayer should complete the application. Once you’ve submitted your application, you’ll receive a letter from HMRC detailing whether or not you’re eligible. It can take up to two months for successful applications to start providing the allowance.
Born before 6 April 1935 – give married couple’s allowance a go
Marriage allowance and married couple’s allowance are two different things. Married couple’s allowance might be the one for you if you or your partner were born before 6 April 1935. You can find out more about Married Couple’s Allowance on the government website.
Your tax code will look a little different
If your application’s successful, your tax code will change too – depending on whether you’re getting the allowance or transferring it to your partner:
- Getting the allowance: your tax code will end with M
- Transferring the allowance: your tax code will end with N
Marriage Allowance claims are automatically renewed every year. But you should let HMRC know if your circumstances change . These could include divorce, death, or if the non-tax paying partner starts to tiptoe over the personal allowance threshold.
Tax benefits can change and depend on an individual's circumstances.
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