HM Revenue and Customs (HMRC) has effectively increased the tax-free personal allowance for eligible married couples and civil partners to £13,830 for the 2025-26 tax year. This significant boost is achieved through the Marriage Allowance scheme, which allows a lower-earning partner to transfer part of their unused personal allowance to their higher-earning spouse.
How the Marriage Allowance Works
The Marriage Allowance is a valuable tax perk designed for couples where one partner earns less than the standard Personal Allowance of £12,570, making them a non-taxpayer. This individual can transfer £1,260 of their allowance to their spouse or civil partner, provided the higher earner is a basic-rate taxpayer. To qualify, the higher earner must have an income below £50,270.
This transfer does not change the higher earner's personal allowance on paper, but it effectively reduces their annual tax bill by up to £252. The mechanism works by increasing the point at which the recipient partner starts paying income tax, thereby lowering their overall liability.
Eligibility and a Crucial Warning from Martin Lewis
Financial expert Martin Lewis, founder of Money Saving Expert, has highlighted a critical detail for couples to understand. He explains that while the allowance transfer reduces tax, it does not alter the threshold for higher-rate tax. This means if your partner's income is already slightly over £50,270, transferring the allowance will not bring them back into the basic rate band to make you eligible.
"As stated above, the basic rate taxpayer will need to be earning less than £50,270 in order to qualify," Lewis emphasised. This distinction is vital to avoid unsuccessful applications.
Claim Now and Potentially Backdate Your Savings
One of the most advantageous aspects of the Marriage Allowance is the ability to backdate claims. Eligible couples can apply to backdate their claim for up to four previous tax years, provided they met the criteria during those periods. This could result in a substantial one-off payment from HMRC.
It is important not to confuse the Marriage Allowance with the separate Married Couple's Allowance (MCA). The MCA is only available where one or both partners were born before 5 April 1935 and works differently, allowing a reduction to a tax bill of up to 10%.
For the vast majority of working-age couples, the increased Marriage Allowance offers a straightforward way to optimise household finances and keep more money each year.
