You don’t usually pay Income Tax on all of your taxable income. This is because most people qualify for one or more allowances. An allowance is an amount of otherwise taxable income that you can have tax-free each tax year. This guide provides a simple explanation of how the Marriage and Married Couple’s Allowance works. These allowances are usually increased each year and normally apply from the start of the tax year (6 April).
- Marriage Allowance
- How to apply for Marriage Allowance
- Claiming Marriage Allowance for previous years
- Claiming Marriage Allowance if your partner has died
- Married Couple’s Allowance
Marriage Allowance
Married couples and those in civil partnerships can transfer up to £1,185 of personal allowance (10% of the £11,850 personal allowance for 2018-19) to their partner for 2018-19 and is sometimes known as the Marriage Tax Allowance.
You might be eligible for this if:
- you’re married, or in a civil partnership and are not in receipt of Married Couple’s Allowance
- one of you earns less than the Personal Allowance so is not liable to tax or liable to tax at the higher or additional rates. This means an income of less than £11,850 while your partner is a basic rate taxpayer with income between £11,851 and £46,350
- you were born after 6 April 1935. If you weren’t, you might be able to get Married Couple’s Allowance.
If you’re eligible, married couples and civil partners, but not unmarried couples, can transfer 10% of their Personal Allowance (£1,185 in 2018-19) to their partner. This means the partner who earns more will get £1,185 added to their Personal Allowance (the amount you can earn before having to pay tax on your income).
20% of this allowance is given as a reduction in your tax bill (unlike the Personal Allowance which is deducted from your taxable income before tax is worked out).
Here’s an example.
If you earn £30,000 a year, which means you’re a basic rate taxpayer, and your partner earns £8,000 a year and so is a non-rate taxpayer, your household could be £237 better off:
Partner 1
| Without Marriage Allowance | Including Marriage Allowance | |
|---|---|---|
| Income | £30,000 | £30,000 |
| Personal Allowance | £11,850 | £13,035 |
| Income Tax | £3,630 | £3,392 |
| Tax saving | 0 | £237 |
Partner 2
| Without Marriage Allowance | Including Marriage Allowance | |
|---|---|---|
| Income | £8,000 | £8,000 |
| Personal Allowance | £11,850 | £10,665 |
| Income Tax | £0 | £0 |
| Tax saving | 0 | £0 |
In this example, once the non-taxpayer (Partner 2) earns over £10,665 (the difference between the standard personal allowance of £11,850 and the amount that’s been transferred, £1,185), this becomes less beneficial. This is because the non-taxpayer would pay tax on income over £10,665 rather than £11,850.
How to apply for Marriage Allowance
You can apply online at HMRC. All you need are your National Insurance numbers and identification.
You can also apply by phone on 0300 200 3300*.
*Lines are open Monday to Friday: 8am to 8pm, Saturday: 8am to 4pm, Sunday: 9am to 5pm. There may be call charges. See GOV.uk for details.
Claiming Marriage Allowance for previous years
Marriage Allowance was started in April 2016 and you can claim the benefit from that date if you didn’t do it at the time.
You need to meet the criteria for each year you apply for. Keep in mind that the threshold for non-taxpayers and basic rate taxpayers was different in 2016 and 2017.
This could be worth up to £662.
Claiming Marriage Allowance if your partner has died
If your partner died after 2015, and you meet the other criteria for Marriage Allowance, you can still apply for the benefit.
You’ll be applying for a backdate of the benefit, so you’ll get the benefit as if you had applied for it from April 2016.
This will be worth up to £662, but you’ll only get payments for the years in which both of you were alive.
Married Couple’s Allowance
Instead of the Marriage Allowance, couples where one or both partners are born before 6 April 1935 may be able to claim a more generous allowance, called Married Couple’s Allowance.
For 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 date, it’s the income of the highest earner.
Tax relief for the Married Couple’s Allowance is given at the rate of 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 that can be earned.
The easiest way to check how much you’ll get is to use the calculator on the GOV.uk website.
You can claim Married Couple’s Allowance in your Self Assessment tax return or if you don’t fill one out, you can get in touch with HMRC with details of your marriage or civil partnership ceremony and the details of your spouse or civil partner.
Find out more on GOV.uk.
*Lines are open Monday to Friday: 8am to 8pm, Saturday: 8am to 4pm, Sunday: 9am to 5pm. There may be call charges. See GOV.uk for details.
This article is provided by the Money Advice Service.
