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Marriage tax allowance explained

Are you married or in a civil partnership? If so you may be entitled to a £1150 tax break called the marriage tax allowance. Yet about one million couples are still missing out. It’s free money, so worth checking – and you can now qualify even if your partner has passed away.

The marriage tax allowance is a way for couples to transfer a proportion of their personal allowance (the amount you can earn tax-free each tax year) between them.

Who can get it?

This is the most important factor as only people with these specific circumstances will be able to apply:

  • You’re married or in a civil partnership (just living together doesn’t count).
  • One of you needs to be a non-taxpayer, which usually just means earning less than the £12,500 personal allowance (£11,850 for 2018/19, £11,500 for 2017/18, £11,000 for 2016/17)
  • The other needs to be a basic 20% rate taxpayer (higher or additional-rate taxpayers aren’t eligible for this allowance). This means you’d normally need to earn less than £50,000 (£46,350 for 2018/19, £45,000 for 2017/18, £43,000 for 2016/17)
  • You must both have been born on or after 6 April 1935


So, in a nutshell one of you must be a non-taxpayer and one must be a basic-rate taxpayer.

What’s this about £1150, wasn’t it £900 last tax year?

The marriage tax allowance started on 6 April 2015, and in year one was worth £212. For the following tax year, starting in April 2016, it was worth £220 and the year after – beginning April 2017 – it was worth £230. For last year it was worth £238 and for this tax year – beginning April 2019 – it’s worth £250. Plus claim it now and it’s backdated so many get previous years’ AND this year’s allowance – £1,150.

Sounds promising – so how does the maths work?

The partner who has an unused amount of personal allowance can transfer £1,250 of their allowance to the other (so basically 10% of the full allowance). It doesn’t matter if they have £5,000 of allowance left or £500; they can only transfer £1,250.

This is how it works:

Part-time Peter works just enough and earns £5,000 at his local fish and chip shop. His full personal allowance for the year is £12,500, so he has plenty of spare allowance to transfer £1,250 to his wife.

Peter’s wife, full-time Fiona, is a software developer. She earns £35,000 and is a basic-rate taxpayer (higher-rate tax now starts at £50,000 for most). Her personal allowance increases by £1,250 to £13,750 when Peter chooses to make his transfer.

So, she has an extra £1,250 which she would’ve paid tax on at 20% but is now tax-free, so she’s £250 up (20% of £1,250).

Get tax advice from THP Chartered Accountants

For advice on matters tax related, contact THP Chartered Accountants today.  THP have an experienced team of tax professionals who can help advise on your personal situation (e.g. Inheritance tax planning) or your business situation (e.g. company tax investigations).

We have offices in ChelmsfordCheamWansteadSaffron Walden and London City– just give us a call on 020 8989 5147 to see how we can help.

Avatar for Kevin Wheeler
About Kevin Wheeler

My career in the financial services industry started over 30 years ago and I joined Sterling & Law in 2014.

I can offer a wealth of experience in both the personal and corporate sectors, in areas such as (workplace) pensions, pension transfers, retirement provision, life insurance, investment and inheritance tax planning.

I am also Sterling & Law’s specialist auto enrolment project manager, designing, planning and implementing auto enrolment solutions for employers since the auto enrolment regulations were introduced in 2012.

I provide a thorough professional service and aim to develop lasting relationships with my clients.

I am married with two teenage children and enjoy playing tennis, table tennis and going on bike rides with the family.

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