Ask someone what marriage is like, and you’ll probably get one of three responses: a glazed look; a sigh that could be joy or despair and is probably both; or some vague remark about how it “has its ups and downs”.
A few people (accountants, generally) might even mention that being married could save you tax!
What is the Marriage Allowance?
In the current tax year (6 Apr 2019 – 5 Apr 2020), the standard personal allowance is £12,500. This is the amount of income you don’t have to pay tax on. The Marriage Allowance means that someone with unused personal allowance can transfer part of it to their husband, wife or civil partner.
Do I qualify for the Marriage Allowance?
To qualify, a couple must meet the following three conditions:
1. They must be married or in a civil partnership.
2. The lower earner must have an income below their personal allowance (£12,500 in the current tax year).
3. The higher earner must be a basic rate taxpayer (income between £12,501 and £50,000 in the current tax year*).
* Between £12,501 and £43,430 in Scotland.
How much will I get?
You can transfer up to 10% of the lower earner’s personal allowance to the higher earner. So in the current tax year (6 April 2019 – 5 April 2020), this would be 10% of £12,500, which is £1,250. Transferring the full £1,250 means the higher earner will save £250 in tax.
– In the current tax year the personal allowance is £12,500.
– Dan has earned £8,000 in the year. His wife Nicola has earned £38,000.
– Dan has £4,500 in unused personal allowance and can therefore transfer the maximum £1,250 to Nicola.
– Nicola’s personal allowance increases from £12,500 to £13,750.
– The increase in tax-free allowance saves Nicola £250 in tax.
– Dan’s personal allowance is reduced from £12,500 to £11,250. His income of £8,000 still falls within his reduced personal allowance, so he still has no tax to pay.
Marriage allowance can also be claimed retrospectively for the previous four tax years.
How can I apply for Marriage Allowance?
You can apply for marriage allowance online. Or we can help: just call us on 0151 931 2724.