Marriage allowance tax break

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Marriage Allowance: Could You Be Eligible For A Tax Break?

Last updated on Tuesday, February 14, 2017

Written by Alex Cadman

Did you know that if you’re married or in a civil partnership, you could be entitled to a tax break of up to £432? The marriage allowance could save couples hundreds, yet only a few are taking advantage of this tax perk.

It’s estimated that around 2.9 million couples in the UK are missing out on the tax savings available from the marriage allowance. HMRC calculated that around 4.2 million people in the UK are eligible for the allowance, however only 1.3 million people have applied and are using the scheme for a tax break.

What is the marriage allowance?

The marriage allowance is a government tax initiative that started in April 2015 which allows couples to transfer some of their personal allowance to their partner if they earn less than £11,000 per annum.

If your partner earns less than £11,000 per year, they can transfer £1,100 of their personal allowance to you, adding that amount to your personal allowance and saving you money on tax.

To be eligible, the higher-earner must earn between £11,001 and £43,000 before tax.

For example, if you earn £40,000 per year (as a contractor, a freelancer, or even a permanent employee), and your partner earns £8,000 a year, your partner could transfer £1,100 of their personal allowance to you, making your personal allowance £12,100. Because you would normally pay 20% tax on this extra amount, but it is tax-free through the marriage allowance, you now have £220 more (20% of £1,100).

To raise awareness of the marriage allowance, HMRC is currently allowing couples to backdate their claim to the previous tax year of 2015/16, meaning eligible couples can save an additional £212 – earning a total tax saving of £432.  

Are my partner and I eligible for the marriage allowance?

You can be eligible for the marriage allowance if:

  • You and your partner are married or in a civil partnership
  • One of you earns £11,000 or less per year and the other earns between £11,001 and £43,000

You can still apply for the allowance if you live abroad (as long as you have a personal allowance) and if one of you are receiving a pension.

The marriage allowance is an ideal tax saving option if you or your partner are a stay-at-home parent, work part-time, or undertake a freelance role for a bit of extra cash.

A situation where you wouldn’t be eligible for the allowance is if you and your partner live together with no legal marriage or civil partnership arrangement.

How do I apply for the allowance?

HMRC won’t let you know if you are eligible for the allowance, however it has an online marriage allowance calculator where you can input your and your partner’s pre-tax income to determine if you could benefit from the allowance.

You can then apply for the marriage allowance online via the government website, where you’ll be asked to provide some details in order to apply.

Only the partner who has income below £11,000 per year may apply for the allowance, as it will be their portion which is transferred to the higher earner.

Should the government raise the marriage allowance?

A ComRes survey recently discovered that there is overwhelming support for raising the marriage allowance to allow a higher tax saving for married couples. In fact, the survey revealed that support for this is three times higher than for increasing the personal allowance.

However, Chancellor Philip Hammond is unlikely to consider raising the marriage allowance unless more people start taking advantage of it. So if you think you could be eligible, don’t miss out on this opportunity of an additional tax saving.

Here is more useful information to help you save money on tax:


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