Monday, 9 November 2015


Up to three million married couples and civil partners are missing out on a new tax allowance that is worth £220 this year and £230 in 2017/18.

The Marriage Allowance allows a spouse (or civil partner) to transfer up to £1100 of their 2016/17 tax allowance to their partner if 
(a) their income is below the tax threshold (currently £11,000 a year) and 
(b) their spouse does not pay higher rate tax which begins on incomes above £43,000 a year. 

Both must also be born after 5 April 1935 because older couples get a bigger tax break - see Marriage Tax Breaks.

The latest figures show that 1.4 million have claimed it successfully leaving 2.8 million eligible couples who have still to claim.

How it works
If a couple qualifies then the non-taxpayer can transfer £1100 of their unused personal allowance to their spouse. That will save the taxpaying spouse basic rate tax on that amount which is £220 a year (£18.33 a month).

The future
In future years the Marriage Allowance will rise. It is fixed at 10% of the personal tax allowance. So it will be £1150 in 2017/18 then on present plans £1250 by 2020/21.

Claiming and payment
You can claim the allowance online or through the income tax helpline 0300 200 3300. You will need National Insurance numbers and dates of birth for you and your spouse. Lines are open 0800-2000 Mon-Fri or 0800-1600 Saturday. You can also claim by sending a letter with your details to Pay As You Earn, HM Revenue and Customs, BX9 1AS. That might take longer.

Once the transfer is done the spouse receiving the extra allowance will have a suffix M added to their tax code The one making the transfer will have a suffix N and their tax code will be lower. 

It will be backdated to the start of the tax year and then reflected in a reduced amount of tax each month. If you qualified last tax year you should claim for that too. That rebate of £212 will be paid by check or bank transfer. 

HMRC says that the process is now simple and quick and that is confirmed by many on my twitter timeline who have successfully claimed the allowance. 

The transfer can only be for the full amount of £1100. That can be done even if the person transferring the amount has an income close to their personal tax allowance. So someone with an income of £10,500 who is a non-taxpayer can transfer the full £1100 leaving themselves with a personal allowance of £11,000-£1100=£9900. So they will start being a taxpayer and pay basic rate tax on £10,500-£9900=£600 ie a tax bill of £120. Their spouse will save £220 leaving the couple £100 better off.*

HMRC has confirmed that people can also claim the Marriage Allowance if they both pay tax at the basic rate. However in that case they will not be better off as a couple. One will pay less tax, the other an equal amount more. The online claim allows the claim to be made. If you call the helpline they should point out that you will be no better off before allowing it to go ahead.

The Marriage Allowance is only available to married couples and civil partners. It is not available to couples who are not married or civil partners.

If either partner was born before 6 April 1935 then they cannot claim Marriage Allowance because they can claim the higher Married Couple's Allowance. More in Marriage Tax Breaks including allowances for older couples and blind people.

The information and explanations in this blogpost are broadly correct. Accountants will tell you things are not quite that simple and some claim that HMRC is not implementing the law accurately. However, I believe the information here is as accurate as it needs to be and can be relied on by the vast majority to make a successful claim. There is more information about some of the fiddly bits in Marriage Tax Breaks. But they will not be relevant to the vast majority of readers.

30 January 2017
vs. 2.2