What is the benefit of the marriage allowance?
To benefit as a couple, the lower earner must normally have an income below your Personal Allowance - this is usually £12,570. When you transfer some of your Personal Allowance to your husband, wife or civil partner you might have to pay more tax yourself, but you could still pay less as a couple.
How does the marriage allowance work?
Below is an example of how the marriage allowance could work:
If your income is £11,500, you do not pay tax because this is below your Personal (tax free) Allowance of £12,570. If your partner’s income is £20,000, they pay tax on £7,430 (their ‘taxable income’) as their Personal Allowance is also £12,570. This means as a couple you are paying Income Tax on £7,430.
When you claim Marriage Allowance you transfer £1,260 of your Personal Allowance to your partner. Your Personal Allowance becomes £11,310 and your partner gets a ‘tax credit’ on £1,260 of their taxable income. This means you will now pay tax on £190, but your partner will only pay tax on £6,170.
As a couple you benefit, as you are only paying Income Tax on £6,360 rather than £7,430, which saves you £214 in tax.
How much tax could I save with the marriage allowance?
You can calculate how much tax you could save as a couple by using the Marriage Allowance Calculator – however, please note this calculator does not include any allowances such as Personal Savings Allowance or Dividend Allowance. If you receive other income such as dividends, savings or benefits from your job, you can call the Income Tax helpline on 0300 200 3300 to help you work out how much you could save.
You can also backdate your marriage allowance claim to include any tax year since 5 April 2017 (even if your partner has passed away since then) and save up to £1,219 broken down as follows:
- 2017/18 - £230
- 2018/19 - £237
- 2019/20 - £250
- 2020/21 - £250
- 2021/22 - £252
Am I eligible to claim the marriage allowance?
You can benefit from Marriage Allowance if you meet all of the following criteria:
- you’re married or in a civil partnership
- you do not pay Income Tax or your income is below your Personal Allowance (usually £12,570)
- your partner pays Income Tax at the basic rate, which usually means their income is between £12,571 and £50,270 (before they receive Marriage Allowance)
You cannot claim Marriage Allowance if you’re living together but you’re not married or in a civil partnership.
If you or your partner were born before 6 April 1935, you might benefit more as a couple by applying for Married Couple’s Allowance instead.
Get help from the LWA tax team
If you need help claiming the marriage allowance, speak to LWA’s Personal Tax Team on 01925 830 830 in Warrington or 0161 905 1801 in Manchester. You can also email the team via email@example.com. Be aware of companies suggesting they can help you claim the marriage allowance as they will take a percentage of your allowance. Our advice at LWA is to apply direct via the Gov.uk website, however we are here to help guide you in doing so.
For further information from HMRC, please visit gov.uk/marriage-allowance.