A married couple or civil partnership can apply to transfer 10% of the income tax personal allowance from one to the other. Although called the marriage ‘allowance’, it is a transfer rather than an additional allowance.
To qualify for the allowance, neither of the partners can be higher rate taxpayers and cannot be claiming the married couple’s allowance. To benefit as a couple, one person should be earning below the personal allowance (£11,850 for 2018/19).
The maximum tax saving in 2018/19 is £237.00 (10% of the £11,850 personal allowance at 20%).
How to apply
The application for the transfer is made by the person who wants to transfer part of their allowance to their partner. It is absolutely fundamental that the recipient of the allowance does not make the claim.
If your income is predictable, you can apply during the tax year here. If you apply during the tax year, the claim is in place until withdrawn or through either death or divorce.
If your income is unpredictable, because you are self-employed for example, you can make an application after the tax year on your Self-Assessment Tax Return. This claim must be done each year – it does not remain in place for future years.
Currently, you can backdate marriage allowance claims to include any tax year since 5 April 2015 if you were eligible. This means you could claim back as much as £662 if you can claim for 15/16, 16/17 and the 17/18 tax year.
The Married couple’s allowance
If either you or your partner were born before 6 April 1935 you may benefit more from the Married Couple’s Allowance instead, which you can read more about here.
For further information or help on the above, please call the office on 0116 242 3400 or email us at firstname.lastname@example.org
Aiden Hyett, Accounts & Tax