The Marriage Allowance lets you transfer up to 10% of your Personal Allowance to your husband, wife or civil partner. For the 2015-16 tax year, the maximum amount is £1,060.00 that would reduce their tax by £212.00.
The Personal Allowance is the amount of income that you can earn in a tax year on which there is no Income Tax to pay. For most people, the Personal Allowance is £10,600.00 this year.
However, despite HMRC remaining coy on the uptake, it is clear that only a fraction of the four million couples who could benefit have applied.
In a parliamentary written reply on 3rd March 2016 to this question, Mr David Gauke, the Financial Secretary to the Treasury, stated “400,000 couples have successfully claimed Marriage Allowance” and went on to say that “Eligible couples who haven’t already claimed for the tax year 2015/16 will not lose out as they have until 5th April 2020 to do so”.
You are eligible to claim the Marriage Allowance if all four of the following conditions apply:
- you are married or in a civil partnership;
- you have an annual income of less than £10,600 including pensions, savings and investments;
- your spouse or civil partner has an annual income of between £10,601 and £42,385;
- and you were both born on or after 6 April 1935.
Even if you live abroad, you are entitled so long as you receive a Personal Allowance.
If these conditions are met, then you can now apply online at https://www.gov.uk/marriage-allowance.
For the application, you will need your and your partner’s National Insurance numbers.
In addition, you will need a proof of identity that can be:
- the last four digits of the account that your child benefit, tax credits or pension is paid into;
- the last four digits of an account that pays you interest;
- or details from your P60.
The £1,060 limit will increase automatically in line with any increase in the Personal Allowance in future tax years.
The Marriage Allowance will continue to transfer automatically until either you or your partner cancels it due to a change in circumstances. Depending on the reason, it will either run to the end of that tax year or can be backdated to the start of the year
If you would like to discuss the Marriage Allowance in particular or your tax affairs in general, please email us at firstname.lastname@example.org for an initial consultation that is free and without obligation.