What is Marriage Tax Allowance?

The Marriage Allowance is a tax incentive put in place by the Government that can be helpful for married or civil partnered couples, particularly if one partner or spouse is a lower earner.

Depending on income, it’s possible for households to reduce their tax by up to £250 per year.

How does Marriage Tax Allowance work?

The personal tax allowance for people in the UK, at time of writing (August 2019), is £12,500. That means that up to £12,500 of your earnings are essentially tax free. If you earn any more than that, income tax is collected on the remainder of your salary.

In a marriage or civil partnership, this allowance can be transferred from one partner to another. This means that the higher earning partner gains an additional tax allowance.

However, the Marriage Tax Allowance works to very specific rules, especially when it comes to earnings. For example, the partner who is receiving the extra allowance needs to be a basic rate tax payer. This means that they must be earning between £12,501 to £50,000 and paying 20% tax.

In Scotland this tax bracket is between £12,501 and £43,430.

Am I eligible for Marriage Tax Allowance?

You should be eligible for Marriage Tax Allowance if you meet the following criteria:

• You’re married or in a civil partnership.
• You or your partner were born after April 5, 1935.
• One of you earns less than the personal allowance.
• One of you earns more than the personal allowance, and up to the basic tax rate.

You can also claim Marriage Tax Allowance if your partner died on or after April 1, 2015.

Should my partner or I apply for Marriage Tax Allowance?

The lower earner will need to apply for Marriage Tax Allowance, which can be done online. If you’re the applicant and the application is successful, then HMRC will set your partner up by either their self-assessment tax return or adjusting their tax code.

A tax code adjustment can take around two months to process.

Can Marriage Tax Allowance be backdated?

Although this never used to be the case, since November 2017 it has been possible to backdate Marriage Tax Allowance.

This means you can claim back all the tax you would paid, depending on whether or not you and your spouse or partner meet the right criteria. However, you can only claim back as far as four years.

You’ll need to call the HMRC Income Tax helpline to start the process of claiming back your tax.

Can I cancel my Marriage Tax Allowance?

Yes, you can by contacting HMRC.

Can I claim Marriage Tax Allowance if I'm unemployed?

Yes – one of the stipulations of getting the Marriage Tax Allowance is that one of you needs to be not paying tax. If you’re unemployed, you can transfer 10% of your personal allowance to your partner – but they must be earning, and be a basic rate taxpayer.

Self-employed people can also claim marriage tax allowance if one partner earns less than £12,500 and the other earns between £12,501 and £50,000.

It’s important to remember that if one of you does self-assessed tax returns, marriage tax allowance will reduce your bill.

What is the difference between the Marriage Tax Allowance and Married Couple’s Allowance?

The Marriage Allowance is a tax incentive that allows the lower income partner to transfer £1,250 of their personal tax allowance to their civil partner or spouse.

The Married Couple’s Allowance is offered to couples where one or both spouses are born before April 6th 1935. Depending on the household, it can reduce the tax bill of the higher earner (in civil partnerships) or traditionally the husband’s tax in a marriage by anything between £345 and £891.50 each year.