Marriage Allowance

What is a Marriage allowance?

Earlier known as a transferable allowance for married couples and civil partners, marriage allowance was introduced on 6 April 2015.

A marriage allowance is a tax benefit available to married or civil partnership couples. One low-income individual can transfer £1,250 of their Personal Allowance (the sum received tax-free per year) to their partner.

This can reduce tax liability by £252. You can backdate the claim since April 2017.

The higher-earning partner would then receive a marriage allowance claim equal to the amount of personal allowance transferred, provided that they are a basic-rate taxpayer.

Who is eligible for the HMRC marriage allowance?

Only taxpayers in the following situations will be eligible to apply:

  • You must be married or in a civil union (merely cohabiting does not qualify).
  • One of you must be a non-taxpayer for a tax year, which usually means earning less than the £12,570 personal allowance.
  • The other spouse must be a basic 20 per cent rate taxpayer (this allowance is not available to higher or additional-rate taxpayers).
  • You and your partner must have been born on or after 6 April 1935 (if you weren't, there's another tax benefit).

In a nutshell, one of you must be a basic-rate taxpayer, and the other must be a non-taxpayer, and you, as a taxpayer, have to use online registration for claiming to transfer the allowance.

PAYE tax codes

Following tax codes are used:

  • M stands for the partner or spouse receiving the allowance.
  • N stands for the partner or spouse transferring/sending the allowance.

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