The marriage allowance was introduced 6 April 2015, it allows an individual, normally with income below the personal allowance to transfer 10% of their personal allowance to their husband, wife or civil partner. It’s the individual with the lower income that can transfer 10% of their personal allowance to their higher earning spouse. This is then added to the higher earning spouses’ personal allowance.
The Marriage Allowance is also known as the transferable tax allowance but should not be confused with the Married Couples Allowance.
Partner 1 earns £7,000 per annum, partner 2 earns £35,000
Partner 1 transfers £1,250 to partner 2
This would give a tax saving of £250 calculated as £1,250 x 20% = £250 for the current tax year.
- One of you earns less than the personal allowance currently £12,500 and your partner earns income within the basic rate band, £12,501 – £50,000.
- You were born after 6 April 1935.
- You are married or in a civil partnership.
- You are not in receipt of the Married Couple’s Allowance.
How to claim
The lower earner will need to make the claim, this can be made over the phone by calling the HMRC income tax helpline or online — details here .
An application can also be made through self-assessment or by writing to HMRC.
The claim can be made up to 4 years from the relevant tax year.
Backdating your claim
You can back date your claim for up to 4 years, this can be done online or by contacting the HMRC income tax helpline and by post.
A four-year claim could be worth £900.
You can claim for a deceased partner’s allowance.
Your personal allowance will transfer automatically to your partner every tax year — if your circumstances change, you will need to contact HMRC to cancel the transfer.