Marriage Tax Allowance: Are You Eligible?

Sean MacNicol

July 11, 2016

November 13, 2018

Marriage Tax Allowance: Are You Eligible?

What is it?

Your tax free allowance is the amount you are allowed to earn without paying income tax. Everything above this threshold is normally taxed.

When someone has little or no earnings and relies on their partner's income, marriage tax allowance allows them to transfer 10% of their tax free allowance to their partner. This means that the higher earning partner pays tax on a smaller amount of their income, leaving them with more in their pockets.

Only 10% of the non-taxpayer's tax free allowance can be transferred. This means even if you have already used 95% of your tax free allowance, you must transfer 10%, and pay tax on the amount you exceed the threshold by. Provided you haven't used all your allowance, you will still save.

The financial year goes from 6 April – 5 April. If you qualify for 2015/2016 you can claim £212 tax allowance. For 2016/2017 this will increase to £220. You can currently claim for both years.

Am I Eligible?

You can apply for Marriage Tax Allowance if:











How Can I Apply?

The non-taxpayer can apply for Marriage Tax Allowance on the HMRC website. You will need ID and both you and your partner's National Insurance numbers. If you are applying for last year and this year, you may have to do two applications, but once you are accepted the allowance will transfer each year automatically until it is cancelled or HMRC are informed of a change in circumstances that affects your eligibility.

If your circumstances change and you are no longer eligible, you will not be penalised. HMRC will learn of your change of income either from your employer of in your self-assessment tax return and they will update your tax code and tax free allowance as is appropriate. If you are not sure whether you will be eligible, it's worth applying to see if you meet the requirements.

If you are accepted as eligible, the basic-rate taxpayer will be given a new tax code, or if self-employed will see a reduction in their self-assessment bill. If you are applying for last year, you will be posted a cheque for the tax refund.

Sean MacNicol

Engagement Manager

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