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Understanding the UK marriage allowance

Have you heard about the UK marriage allowance?

It's a little known tax break for couples who are married or in a civil partnership, and it's very useful for couples where one person earns more than the other.

What is it?

Everyone gets a tax-free annual allowance, in the current tax year this is £11,500. It means that you can earn up to this amount and not pay any tax or National Insurance to the government. Anything you earn above this is taxed.

The Marriage Allowance is a government scheme to help couples where one partner earns less than £11,500. Where this partner is earning below £11,500 they aren’t receiving all of their tax-free allowance. So they can transfer 10% (£1,150) of this allowance to their partner.

This means that the high-earning partner is taxed on less of their salary, so their take-home pay increases. This can save couples up to £230 a year.

Who can claim it?

If you can answer "Yes" to all four of the following questions, then you could claim this tax break.

Are you:

  1. Married or in a civil partnership?
  2. Does one person earn £11,500 a year or less?
  3. Does the other person earn between £11,500 and £45,000?
  4. Were you both born after 6th April 1935?

If you've answered yes to all of these questions, then you should look at whether you would benefit from claiming this tax break.

How to apply

Simply apply online on the HMRC website (opens in a new tab). The person on the lower income must be the one to make the application. You will need your National Insurance (NI) number, your partner's NI number, proof of ID and your bank details if you are in receipt of other benefits or a pension as well.

Download our full guide to the marriage allowance

For a full overview of this tax break, how it works, and about backdating your claim to save up to £662.

Download the PDF guide

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Categories: Financial Education

Tags: tax, tax allowances, tax saving

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