Are you eligible for Marriage Allowance?

Gemma Newstead
Gemma Newstead

A friend of mine has said that my partner can claim extra tax allowances because I earn less than the personal allowance.

Is this correct? And if it is, what can we do to claim the extra allowances?

Mrs K, Bexhill

The Marriage Allowance came into effect on 6 April 2015 and allows lower earning couples to share part of their personal tax-free allowance. The Marriage Allowance is available to married couples and those in a civil partnership where a spouse or civil partner doesn’t pay tax (i.e. one of the couple earns less than £12,500 in 2019/20). There is a different Married Couple’s Allowance for those born before 6 April 1935 that is more beneficial.

Marriage Allowance lets you transfer 10% of your personal allowance, £1,250 for 2019/20, to your husband, wife or civil partner if they earn more than you.

This reduces their tax by up to £250 in the tax year 6 April 2019 to 5 April 2020.

If you were eligible for Marriage Allowance in any of the previous 4 tax years since 6 April 2015 you can backdate your claim to include these years also. Backdated claims will be paid by cheque and the potential refund for the previous 4 tax years is £900.

You are eligible for the Marriage Allowance if all the following apply:

you’re married or in a civil partnership during the tax year

one of you don’t earn anything or your income is under the personal allowance for the tax year, £12,500 for 2019/20

The other partner needs to be a basic rate 20% taxpayer during the year, income between £12,501 and £50,000 for the 2019/20 tax year

If your application is successful, changes to your Personal Allowances will be backdated to the start of the tax year, 6 April 2019. HM Revenue and Customs (HMRC) will give your partner their extra allowance either by changing their tax code (this can take up to 2 months) or when they send their Self-Assessment tax return, if they’re self-employed.

The application for the marriage allowance can be made online www.gov.uk/apply-marriage-allowance or by telephone on 0300 200 3300. The application must be made by the non-taxpayer who is transferring their allowance. You will need your national insurance number, your partner’s national insurance number and one piece of ID for the non-tax payer. If you are claiming for previous tax years you will have to select this option during the application.

Your Personal Allowance will transfer automatically to your partner every year until one of you cancels the Marriage Allowance or your circumstances change, e.g. because of divorce or death.

If you would like to discuss your circumstances in greater detail, Ashdown Hurrey can advise on this matter in addition to other tax, accountancy and business matters. Please contact Gemma Newstead on 01424 720222 or email her at GemmaN@ashdownhurrey.co.uk.