What is Marriage Tax Allowance, How Can I Claim and Am I Eligible to Apply?

You could claim £900 back!

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Married couples or those in a civil partnership could be entitled to a £900 tax break. However, around 1 million eligible UK couples still haven’t claimed for it.

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This is due to the marriage tax allowance which allows a couple to transfer some of their personal allowance between them, according to Martin Lewis of Money Saving Expert.

Here’s exactly what the marriage tax allowance is, how much you could claim and whether you are eligible.

What is the Marriage Tax Allowance?

The marriage tax allowance launched on the 6th April 2015. It’s a tax break for married couples or those in a civil partnership where one partner is a non-taxpayer and the other pays tax at the basic 20% rate.

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The non-taxpayer is able to transfer 10% of their personal allowance (the £11,850 you can earn tax-free per year) to their partner. That means that an extra £1,190 of their partner’s income for the 2018/2019 tax year is now tax-free, which works out to an extra £238 in your bank account.

Because you are able to claim back each year since the marriage tax allowance came into law, you are eligible for £662 since 2015. Combined with this year’s allowance, you could be due a £900 rebate.

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Note that you can’t claim for any year where you didn’t meet the necessary eligibility criteria, i.e. where you earned over the personal allowance for that year or your partner paid tax at a higher rate.

Am I Eligible to Apply?

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There are specific requirements you have to meet to be eligible.

  • You are married or in a civil partnership (you can’t just be cohabiting)
  • One of you is a non-taxpayer who earns less than the Personal Allowance of £11,850. Your partner needs to be a basic rate taxpayer, earning between £11,851 and £46,350
  • You were born after 6 April 1935 (if you weren’t, you can claim for the Married Couple’s Allowance

You can claim even if your partner has passed away since April 2015 and the other criteria apply.

What If I Have Less that £1,190 of Unused Personal Allowance?

You have to transfer 10% of your personal allowance, that figure can’t change. To get the full £238, you would have to learn less than £10,660 (£11,850 minus the allowance of £1,190).

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However, don’t be put off if you earn just over that. You’ll have to pay the basic rate of 20% on everything you go over the threshold, but there will likely still be a net gain as you’ll be paying tax on such a small amount.

How Can I Claim the Marriage Tax Allowance?

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The non-taxpaying partner must apply to transfer their personal allowance. It’s very simple and can be done via a form on the HMRC website. You’ll need both your National Insurance numbers and a form of ID, like a passport or driving license.

If you receive other income from dividends of saving, or either one of you is a Scottish taxpayer, you’ll need to call the Income Tax Helpline on 0300 200 3300. (This is the number to call if you have any problems filling the form in online too.)

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You’ll automatically receive the marriage tax allowance if you applied last year so you don’t need to worry. However, if your circumstances change, you should inform HMRC.

What Will Happen After We Apply?

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The partner who pays tax will have their personal tax code changed or their self-assessment bill will be reduced if they pay tax by self-assessment. The partner who transferred their personal allowance may also get a new tax code if they are employed.

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This year’s marriage tax allowance will then automatically be taken off your tax bill. Any money due from previous years will be automatically sent to you by cheque.

For more information, speak to HMRC or visit their website.

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If your parents wish to give you a tax-exempt gift to help pay for your wedding, make sure you find out all the rules about it in our guide to family wedding contributions.