Are you entitled to the £900 Marriage Tax Allowance?

April 26, 2018

It is estimated that nearly two million UK couples are eligible but yet to the claim the Marriage Tax Allowance which was introduced in April 2015. This allows couples who meet certain criteria to transfer £1,190 of their personal tax allowance from one partner to the other, representing a tax saving of £238 for 2018/19.

Who is eligible for the Marriage Tax Allowance?

To be eligible for the Marriage Tax Allowance you must meet the following criteria:

  • You must be married or in a civil partnership
  • One partner must be a non-taxpayer i.e. they earn less than their personal allowance of £11,850 (for 2018/19)
  • The other partner must be a standard rate (20%) tax payer i.e. they earn between £11,851 and £46,350, or £43,430 if you’re in Scotland (for 2018/19)
  • You must have both been born on or after 6 April 1935 (if you were born before then you may be eligible for the Married Couple’s Allowance)

How does the Marriage Tax Allowance save you money?

The non-taxpaying partner can transfer £1,190 of their tax free personal allowance to their partner who pays the standard rate of tax. This means that the non-taxpayer’s personal allowance is reduced to £10,660 and the standard rate tax payers’ tax free allowance rises to £13,040, meaning that they can save the 20% of the tax that they would be paying on the extra £1,190 – a total of £238.

The Marriage Tax Allowance can also be backdated for any years when you were eligible starting from 6 April 2015. This means that if you were eligible every year since it was introduced you would be owed £212 for 2015/16, £220 for 2016/17, £230 for 2017/18 and then £238 for 2018/19 totalling £900.

You can also apply for any of the individual years that you would have been eligible for the Marriage Tax Allowance since 2015, even if you are no longer eligible now.

If you have already applied for, and received, the Marriage Tax Allowance for last year, you will automatically be given it this year and for all future years, unless you inform HMRC that your circumstances have changed and that you are no longer eligible.

How do you apply for the Marriage Tax Allowance?

You can apply online for the Marriage Tax Allowance at gov.uk/apply-marriage-allowance. The application must be made in the non-taxpayers name and you will need:

  • Both partners’ National Insurance numbers
  • Proof of your identity such as:
    • the last 4 digits of the account that your child benefit, tax credits or pension is paid into
    • your passport number and expiry date
    • details from your P60
    • details from any of your 3 most recent payslips
    • the last 4 digits of an account that pays you interest

How is the Marriage Tax Allowance paid?

If you are claiming Marriage Tax Allowance for the current tax year this will be provided by an adjustment to both partner’s tax codes. Any allowance owing from previous years will be paid via a cheque.

What if I have less than £1,190 unused personal allowance?

As long as you still have some unused personal allowance, the Marriage Tax Allowance will allow you to transfer £1,190 to your partner. However you can only transfer exactly that amount. Therefore if the non-taxpayer earns £10,900 per year, but transfers £1,190 of their personal allowance to their partner that will reduce their personal allowance to £10,660 and they will have to pay standard rate (20%) tax on the £240 that they earn over their tax free allowance, which equals £48. However the standard tax rate paying partner will still save £238 from their tax bill, leaving a net gain for the couple of £190.

If you are struggling with your finances and believe that you are eligible we strongly recommend that you apply for the Marriage Tax Allowance. Another important step would be to talk to the friendly experts at Scotland Debt Solutions. We have been helping people in Scotland cope with their problem debt since 1989. We can talk you through your options such as Debt Arrangement Schemes, Trust Deeds and Sequestration and work with you to get you on the path to a debt free future. Contact us on 0800 063 9250 for a free initial same day meeting.

John Baird

Insolvency Adviser

Tel: 0800 063 9250

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