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18th June 2024

More than 2.1 million couples currently benefit from the tax break, which allows husbands, wives and civil partners to transfer part of their tax-free personal allowance to their higher-earning partner.

marriage tax allowance sm

However, HMRC estimates that 4.2 million couples stand to gain from the tax break, meaning more than 2 million couples could be missing out from the tax scheme introduced in 2015 by David Cameron to help married couples and civil partners pay less tax.

With take-up being so low, it’s clear there is a general lack of awareness and understanding of the scheme.

What is marriage allowance, and how does the marriage allowance work?

The marriage allowance allows you to give up some of your personal allowance to provide an amount (a tax credit) that can reduce the amount of income tax that your spouse or civil partner pays.

The scheme enables people who have income less than the personal allowance  which for the 2024/25 tax year is £12,570, (and if applicable less than the £5,000 tax free savings allowance in addition to the personal allowance) to transfer up to £1,260 of their unused personal allowance to their husband, wife or civil partner. In practice, this means a current tax saving of £252  per tax year. The exact amount depends on how much both partners earn. But it is possible to backdate the claim to 5 April 2021 – so the tax savings can add up.

Who is it aimed at?

The marriage allowance is designed to benefit couples where one partner either isn’t working or is perhaps in part-time employment. The following criteria apply:

  • You must be married or in a civil partnership.
  • If one or both of you were born before 6 April 1935, another tax break will apply – (The Married Couples Allowance).
  • One spouse needs to be a non-taxpayer.
  • The other spouse must be a basic rate taxpayer, so earning no more than £50,270, or £43,662 for Scottish taxpayers. .

However, the following exemptions apply:

  • Couples who are not married or in a civil partnership are not eligible.
  • You cannot apply if one partner is a higher-rate taxpayer, regardless of how much the other partner earns.

Just check if the non-taxpayer earns over £11,310 as the marriage allowance will be withdrawn and in some situations the claim will not provide a tax benefit.  You can check your situation at Eligibility Criteria - Marriage Allowance - GOV.UK (tax.service.gov.uk)

How to claim marriage allowance

We want to make sure everyone eligible takes advantage of the marriage allowance and avoids paying unnecessary tax. So, if you qualify, you really should be claiming the allowance. After all, every little scrap of tax advantage adds up!

It’s quick and easy to apply. The non-taxpayer will need to complete the online application on the GOV.UK website. If you're eligible and apply successfully, you'll automatically get the tax break each year in future, so you don’t need to keep reapplying.

At Ascot Lloyd, we’re always looking to do the best for our clients. Speak to your financial adviser on how they can help you manage your personal finances, or our client service team who will be happy to speak with you.

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Our Financial Advisers are available on the phone so please contact us if you have any questions.

Important Information

Past performance is not a guide to future performance and may not be repeated. Investment involves risk.

This communication is for information purposes only and is based on our understanding of current UK tax legislation and HM Revenue and Customs (“HMRC”).  Levels and bases of taxation and reliefs are subject to change and their value to you will depend on your personal circumstances. Nothing in this communication constitutes financial, professional or investment advice or a personal recommendation.

Tax treatment depends on the individual circumstances of each client and may be subject to change in the future.

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