Millions of married couples and civil partners in the UK failed to claim their slice of £1.3 billion in marriage allowance cash in 2016/17, with many unaware of the tax break or forgetting to claim it.

Introduced on 6 April 2015, the marriage allowance is designed for couples where one partner pays the basic rate of income tax and the other is a non-taxpayer.

More than four million married couples and 15,000 civil partners are eligible to claim up to £238 in 2018/19, find out if you're eligible for this tax break.

What are you entitled to?

Whoever does not pay tax in your marriage or civil partnership can reduce their personal allowance by £1,190 in 2018/19 and transfer it to their spouse or civil partner.

It's possible for the taxpaying spouse or civil partner to increase their tax-free personal allowance to £13,040 (£11,850 + £1,190) in 2018/19.

You may benefit from the marriage allowance if:

  • your spouse or civil partner has elected to reduce their personal allowance in 2018/19 and transfer it to you
  • you are a basic-rate taxpayer in 2018/19
  • you meet the residence requirements and have the right to claim a personal allowance
  • neither you nor your partner submits a claim to the married couple's allowance (MCA).

Elderly exclusion

The MCA is only available to people born before 5 April 1935 and in rare cases where both the marriage allowance and the MCA are available, it is usually preferable to claim the MCA.

The MCA provides a potential tax deduction of between £336 and £869.50 a year, compared to £238 from the marriage allowance.

Personal allowance

You can choose to reduce your personal allowance if you're married or in a civil partnership with the same person for the whole or part of the tax year at the time the claim is made.

You must also only be liable to pay income tax at the basic rate, dividend nil or ordinary rate or the basic or starting rate for savings after your personal allowance has been reduced by the transfer.

You must elect to use the marriage allowance within four years after the end of a tax year, and it will remain in force until you give notice to withdraw it.

However, an election made after the end of a tax year applies only to the year of election.

This is the easiest way for us to operate the allowance for you, as it can be made when your tax return is prepared and once we know your income and your partner's for 2018/19.

Separation and divorce

If you and your spouse or civil partner separate between the end of a tax year and the date your tax return is due, there's a slight chance you'll lose your eligibility for the marriage allowance.

Cancelling the marriage allowance normally takes effect from the next tax year unless the marriage or civil partnership has come to an end through:

  • divorce (decree absolute)
  • order of judicial separation
  • decree of nullity 
  • in the case of a civil partnership, a dissolution order, order of nullity or order of separation.

In these circumstances, the withdrawal of the marriage allowance can be backdated to the start of the tax year.

Death of a partner

If your spouse or civil partner dies, it's possible to make a backdated claim for the marriage allowance providing the deceased spouse or civil partner was eligible for it when they were alive.

A claim can be made for any tax year in which you were both alive, including the tax year of death, although no claim can be made thereafter.

Get in touch to discuss the marriage allowance.

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