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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.
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.
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:
However, the following exemptions apply:
Just check if the non-taxpayer earns over £11,310 as the marriage allowance will be withdrawn and in some situations the claim will not provide a tax benefit.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)
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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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.
The value of investments and the income from them may go down as well as up and investors may not get back any of the amount originally invested. Because of this, an investor is not certain to make a profit on an investment and may lose money. Exchange rate changes may cause the value of overseas investments to rise or fall.
This communication is for information purposes only. Nothing in this communication constitutes financial, professional or investment advice or a personal recommendation. This communication should not be construed as a solicitation or an offer to buy or sell any securities or related financial instruments in any jurisdiction. No representation or warranty, either expressed or implied, is provided in relation to the accuracy, completeness or reliability of the information contained herein, nor is it intended to be a complete statement or summary of the securities, markets or developments referred to in the document.
Any opinions expressed in this document are subject to change without notice and may differ or be contrary to opinions expressed by other business areas or companies within the same group as Ascot Lloyd as a result of using different assumptions and criteria.
This communication is issued by Capital Professional Limited, trading as Ascot Lloyd. Ground Floor Reading Bridge House, George Street, Reading, England, RG1 8LS. Capital Professional Limited is registered in England and Wales (number 07584487) and is authorised and regulated by the Financial Conduct Authority (FRN: 578614).