MARRIAGE TAX ALLOWANCE
MARRIAGE TAX ALLOWANCE
HMRC marriage tax allowance allows you to transfer 10% of your unused personal allowance (the amount you can earn tax-free each tax year), to your spouse or civil partner, if they earn more than you.
In April 2015, the UK Government introduced Marriage Tax Allowance, a new income tax break for married couples and civil partners. The tax scheme allows some couples to share their personal tax allowance and potentially save on the amount of Income Tax they pay.
(Personal Tax Allowance is the amount a person can earn without being subject to income tax)
In April 2015, the UK Government introduced Marriage Tax Allowance, a new income tax break for married couples and civil partners. The tax scheme allows some couples to share their personal tax allowance and potentially save on the amount of Income Tax they pay.
(Personal Tax Allowance is the amount a person can earn without being subject to income tax)
What is the HMRC Marriage Tax Allowance?
The HMRC Marriage Allowance Claim lets the lower earner within the marriage or civil partnership transfer 10% (£1,257*) of their unused Personal Allowance to their higher-earning partner.
Doing this can significantly reduce the higher earner’s income tax bill.
Doing this can significantly reduce the higher earner’s income tax bill.
What is the Personal Marriage Tax Allowance for 2021/22?
In 2021/22, you can save up to £252* in Personal Marriage Tax Allowance.
An Example To Help You Understand Marriage Allowance Tax:
Your income is £10,500 and your Personal Allowance is £12,570, so you don’t pay tax.
Your partner’s income is £20,000 and their Personal Allowance is £12,570, so they pay tax on £7,430 (their ‘taxable income’). This means as a couple you are paying Income Tax on £7,430.
When you claim Marriage Allowance you transfer £1,257 of your Personal Allowance to your partner. Your Personal Allowance becomes £11,313 and your partner gets a ‘tax credit’ on £1,257 of their taxable income.
This means you still do not pay tax, and your partner now will only pay tax on £6,250. As a couple you benefit, as you are only paying Income Tax on £6,173 rather than £7,430, which saves you £252 in tax every year.
When you claim Marriage Allowance you transfer £1,257 of your Personal Allowance to your partner. Your Personal Allowance becomes £11,313 and your partner gets a ‘tax credit’ on £1,257 of their taxable income.
This means you still do not pay tax, and your partner now will only pay tax on £6,250. As a couple you benefit, as you are only paying Income Tax on £6,173 rather than £7,430, which saves you £252 in tax every year.
What Is The Marriage Tax Eligibility Criteria?
Marriage Allowance Rebate is an elective tax break, meaning that eligible couples will not receive the tax break unless a claim is made. If no claim for Marriage Allowance is made, the taxpayer’s entitlement is simply written off, and the funds are retained by the Government.
To qualify for HMRC’s Marriage Tax Allowance:
It will not affect your application for Marriage Tax Allowance if you or your partner:
To qualify for HMRC’s Marriage Tax Allowance:
- You need to be married or in a civil partnership
- One partner must earn under your personal allowance, which is £12,570 for the 2021/22 tax year
- The other must earn between £12,571 and £50,270. This is the requirement for the UK (excluding Scotland). If you live in Scotland, the other must earn between £12,571 and £43,662 (pay the starter, basic or intermediate rate).
- You both need to have been born after 6 April 1935.
It will not affect your application for Marriage Tax Allowance if you or your partner:
- Are currently receiving a pension.
- Live abroad – as long as you get a personal allowance.