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June 26th 2019

Marriage Allowance

The Marriage Allowance, first introduced in April 2015, enables an individual to transfer a fixed 10% of his or her Personal Allowance to their spouse, saving up to £250 in the current tax year, however, despite being in its fifth tax year, HMRC recently revealed that less than half of eligible taxpayers have made a claim for the Marriage Allowance.

Thankfully, individual taxpayers are permitted by HMRC to claim back overpaid tax in the preceding four tax years, so it is possible to backdate a claim to the 2015/16 tax year, and ensure that you haven’t missed out on any income tax savings – but claims for 2015/16 must be made no later than 5 April 2020.

Qualifying criteria for claiming the Marriage Allowance:

  • You are married, or in a civil partnership during the tax year you wish to apply for the Marriage Allowance (even if you only married part-way through the tax year);
  • The lowest-earning spouse (the transferor) earns less than the Personal Allowance (£12,500 in the current tax year);
  • The highest-earning spouse (the recipient) pays tax at the starter, basic or intermediate tax rates (19%-21%).

Since the recipient spouse is a basic rate taxpayer, the 10% boost to their Personal Allowance will save tax at the basic rate of income tax.

You may make a claim for individual tax years. If you qualify in all of the tax years since 2015/16, the recipient of the Marriage Allowance could receive a refund of up to £899 for four tax years, and they will receive a tax code adjustment for the current tax year, to receive another £250 of income tax relief. Once the application has been made, it will carry forward until you notify HMRC that you no longer qualify. If either spouse is in employment, their tax code will be automatically updated by HMRC, to ensure that the Personal Allowance is adjusted accordingly every year. If either spouse fills in a Tax Return, this will be taken into account by HMRC when calculating the tax due.

You can make a claim by the following methods:

  • Asking us to make the application on your behalf (we must be the authorised tax agent for the lowest-earning spouse);
  • Applying online
  • Calling HMRC’s Income Tax Helpline on 0300 200 3300.

The application should always be made by the lowest-earning spouse. You will be asked for the National Insurance number for both individuals when making the claim.

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