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Marriage Allowance

What is Marriage Allowance?

Marriage Allowance lets people with income of £12,500 or less, transfer up to £1,250 of their Personal Allowance to their husband, wife or civil partner – if their income is higher. This reduces their tax by up to £250 for the 2020/21 tax year.

Who is Eligable?

In England and Wales you can apply for Marriage Allowance if all the following apply:

  • You’re a married couple
  • You do not pay income tax or your income is below the Personal Allowance threshold (£12,500)
  • Your partner pays income tax at basic rate between £12,501 and £43,430

Claims can be backdated four years to April 2015. After 5 April 2020, couples will only be able to claim back to the 2016/17 year.

In excess of 1.78 million couples have already applied for marriage allowance although HMRC estimate that a further 2 million are missing out. If the claim is backdated they could potentially receive up to £1,150.

How to Apply

Marriage Allowance can be applied for online at GOV.UK and you will need your’s and your partners National Insurance numbers. Plus at least one of:

  • the last 4 digits of the account your child benefit, tax credits or pension is paid into
  • the last 4 digits of an account that pays you interest
  • details from your P60
  • Passport number and expiry date

What Happens After You’ve Applied?

You will receive an email confirming your application and HMRC will give your partner the transferred allowance by either:

  • a change to their tax code (M if you are receiving the allowance or N if you are transferring the allowance).
  • Showing the transfer on the Self Assessment tax return if required to submit.

For further information speak to AJR & Co. Ltd or apply direct with HMRC here.