Tax Glossary

Marriage Allowance

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Last updated on:
March 17, 2024

The Marriage Allowance is a beneficial scheme by the UK government for married couples or those in a civil partnership. It permits the lower earner in the relationship to transfer a portion of their Personal Allowance to their higher-earning partner.

How the Marriage Allowance Functions

This allowance provides a tax relief for couples where one partner has a lower income. The individual with the lower income can transfer up to £1,260 of their Personal Allowance to their spouse or civil partner.

The recipient of this transferred allowance enjoys a tax credit equal to the transferred amount, which reduces their overall tax liability. Essentially, this scheme enables the transfer of 10% of the tax-free Personal Allowance to a spouse or partner earning below the Personal Allowance threshold (£12,570) but within the Basic Tax Rate bracket (£12,571-£50,270), potentially saving up to £270 annually on their tax bill.

Eligibility Criteria for Marriage Allowance

To qualify for the Marriage Allowance, couples must meet the following criteria:

  • Be in a marriage or civil partnership
  • One partner does not exceed the Personal Allowance with their income
  • The other partner is a basic rate taxpayer, with income ranging between £12,571 and £50,270

It's important to note that cohabitating partners who are not legally married or in a civil partnership are not eligible for this allowance.

Applying for Marriage Allowance

Applying for the Marriage Allowance is straightforward and done entirely online via the HMRC website. The application should be made by the partner with the lower income. However, if one or both partners have additional sources of income beyond wages, it may be necessary to determine who would most benefit from making the claim. This strategic decision can maximise the couple's overall tax savings.

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