A tax-free allowance increase from HMRC is providing married couples with an additional £252. The Marriage Allowance enables you to transfer £1,260 of your Personal Allowance to your husband, wife, or civil partner.
Understanding the Marriage Allowance
Your Personal Allowance is the amount you can earn before paying tax. By transferring some of it, your partner’s tax reduces by up to £252 in the tax year (6 April to 5 April the following year). To benefit, the lower earner must normally have an income below their Personal Allowance, typically £12,570.
You can calculate how much tax you could save as a couple. However, you should call the Income Tax helpline if you receive other income such as dividends, savings, or job benefits, or if you do not know your taxable income.
When you transfer some of your Personal Allowance, you might pay more tax yourself, but overall the couple pays less. The Labour Party government provides an example: If your income is £11,500 and your Personal Allowance is £12,570, you pay no tax. Your partner’s income is £20,000 with a Personal Allowance of £12,570, so they pay tax on £7,430. As a couple, you pay tax on £7,430.
After claiming Marriage Allowance, you transfer £1,260 to your partner. Your Personal Allowance becomes £11,310, and your partner’s taxable income reduces by £1,260. Now you pay tax on £190, and your partner on £6,170. The couple pays tax on £6,360 instead of £7,430, saving £214 in tax.
Eligibility Criteria
You can benefit from Marriage Allowance if you are married or in a civil partnership and do not pay Income Tax or your income is below your Personal Allowance (usually £12,570). Additionally, your partner must pay Income Tax at the basic rate, meaning their income is between £12,571 and £50,270 before receiving Marriage Allowance.
If you live together but are not married or in a civil partnership, you cannot claim Marriage Allowance. For those in Scotland, your partner must pay the starter, basic, or intermediate rate, typically with income between £12,571 and £43,662.
If you or your partner were born before 6 April 1935, you might benefit more by applying for Married Couple’s Allowance instead. You cannot receive both Marriage Allowance and Married Couple’s Allowance simultaneously.
