You are here: Home - Saving-Banking - Understanding -

Check now: millions of married couples could be owed £900

Written by:
Millions of married couples are missing out on a tax break worth up to £900.

HMRC figures show just over three million couples have successfully applied for the marriage allowance but as many as nine million taxpayers could be eligible, according to analysis by Online Tax Rebates.

Tony Mills, director of Online Tax Rebates, said the low take up is mostly down to people not knowing the scheme exists.

“HMRC will not contact you if you’re eligible or advise on an individual basis if this tax relief is beneficial to you, so it’s up to you to work it out,” he said.

Here’s what you need to know:

What is the marriage tax allowance?

The marriage allowance lets you transfer part of your personal allowance to your partner if they earn more than you.

The personal allowance is the amount of income you don’t have to pay tax on so by transferring some your allowance to your partner, this means they are able to earn more income tax-free.

Who is eligible to receive the allowance?

You can transfer your personal allowance to your husband, wife or civil partner as long as you are a non-taxpayer, which typically means you earn less than £11,850 (or £12,500 from next April), and they are a basic rate taxpayer – so they earn less than £46,350 (or £50,000 from next April).

Co-habiting couples are not eligible.

Both partners must have been born on or after 6 April 1935.

How much can you get?

This tax year, the marriage allowance is worth £238 in your pay check. However, you are able to backdate your claim to include any tax year since 5 April 2015 that you were eligible. As the personal allowance has gradually increased since 2015, so too has the value of the marriage allowance. It means you could be entitled to £900, which you’d receive as a  lump sum.

Is the marriage allowance going up next year?

Yes. From April 2019, the personal allowance is going up to £12,500, which means you could pocket £250 a year.

How do you apply?

The easiest way to apply is online at the website.

The non-taxpayer should complete the application. You can apply at any point during the tax year.

How does it work?

HMRC will either change you partner’s tax code to reflect their increased personal allowance (this can take up to two months) or they’ll get their extra allowance when they file their self-assessment form.

Do you need to apply every year?

No. Once you’ve applied, your allowance will transfer automatically every year unless you cancel it, one of you starts paying a higher rate of income tax or your marriage comes to an end.

Can you claim if you’re unemployed?

Yes, as long as your partner is in employment and a basic rate taxpayer.

What happens if you’ve transferred some of your personal allowance and your partner dies?

Their estate will be treated as having the increased personal allowance and your personal allowance will go back to the normal amount.

What happens if your partner transferred some of their personal allowance to you before they died?

Your personal allowance will remain at the higher level until the end of the tax year (5 April) and their estate will be treated as having the smaller amount.

Can you claim if your partner has died?

Yes, a new ruling means you can claim if your partner has died since April 2015 and you meet all the other eligibility criteria. It’s best to speak to an HMRC adviser over the phone in this situation.

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Your right to a refund if travel is affected by train strikes

There have been a wave of train strikes in the past six months, and for anyone travelling today Friday 3 Febru...

Could you save money with a social broadband tariff?

Two-thirds of low-income households are unaware they could be saving on broadband, according to Uswitch.

How to help others and donate to food banks this winter

This winter is expected to be the most challenging yet for the food bank network as soaring costs push more pe...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Five tips for surviving a bear market mauling

The S&P 500 has slipped into bear market territory and for UK investors, the FTSE 250 is also on the edge. Her...

Money Tips of the Week