HMRC has confirmed that some households can benefit from a personal tax-free allowance of £13,830 through the Marriage Tax Allowance. This scheme permits one partner in a marriage or civil partnership to transfer up to 10% of their unused Personal Allowance to the other partner, reducing their tax bill by up to £252 per year.
How the Marriage Allowance Works
The Marriage Allowance applies when one partner earns less than the standard Personal Allowance of £12,570, and the higher-earning partner's income falls between £12,571 and £50,270 (or £43,662 in Scotland). By transferring 10% of the non-taxpayer's allowance, the receiving partner gets an extra £1,260 tax-free, saving them 20% tax on that amount, which equals £252 annually.
HMRC also allows backdating claims for the previous four tax years, meaning eligible couples can receive a lump sum of over £1,000. According to HMRC: “Marriage Allowance keeps money in your pocket by reducing the amount of tax you and your spouse pay by up to £252 a year. You can check your eligibility and apply on GOV.UK. Search ‘Marriage Allowance’ to find out more.”
Martin Lewis Champions the Scheme
Financial expert Martin Lewis has frequently promoted the Marriage Allowance on his ITV show and social media. On his X/Twitter account, he highlighted the ease of claiming. One viewer shared their experience: “I had retired on medical grounds so I was not paying tax and he said that it is possible to transfer a non-taxpaying spouse’s tax allowance to their partner. Following the show, I went on to the gov.uk website and was surprised how easy it was to complete the forms. We are benefiting from about £250 a year in tax allowance. I was able to claim, I think it was about 4 years of back tax, which was about £1,000. And we used that £1,000 to have a rather nice holiday in Cornwall, particularly as it coincided with Hillary recovering from her chemo. If you can save a few pounds here and a few pounds there, it’s money in the pocket.”
Eligibility and Application Process
Mr Lewis explained: “Imagine we have a couple here. The crucial part of this. One of you needs to be a non-taxpayer, so you are not earning your full personal allowance you can earn before you start paying tax on it.” He added: “Clearly you have to be married or civil partners. Then what happens is this, each of you have your £12,570 personal allowance. That’s the amount you can earn that you don’t pay tax on each year. So the non-taxpayer can apply to Gov.uk to move 10% of their tax-free allowance across to the basic rate taxpayer.”
He continued: “Now that 10% extra tax-free allowance they have, remember they would have paid tax on it at 20%, so the gain there is £252 a year, and that’s what moving across works, and in virtually every circumstance, even if the person here earned a little bit above that threshold where they might pay a little bit of tax, but as long as the person on this side is earning over £13,830, you’re always going to be net up if there’s a non-taxpayer and a taxpayer. The way it works for the current year your tax code is changed, for past years they send you a check or they send you a bank transfer. So the marriage tax allowance is absolutely crucial to do.”
