Marriage allowance – savings and pitfalls

Married couples and those in a civil partnership are being urged by HMRC to check whether they can benefit from the marriage allowance. It takes just 30 seconds to see if you are eligible for an annual tax saving of up to £252.

The marriage allowance is often ignored or misunderstood, but HMRC’s online marriage allowance calculator will instantly work out any tax saving. All that’s needed is gross income – from all sources – for you and your partner.

It is the lower-income spouse or civil partner who applies. Once made, the claim remains in force for future tax years unless subsequently cancelled.

Eligibility and claiming

You cannot claim if you’re living together but are not married or in a civil partnership.

• One spouse or civil partner needs to have some (or all) of their personal allowance unused, which generally means an income of less than £12,570.
• The other spouse or civil partner must only be paying tax at the basic rate, so normally income of between £12,571 and £50,270.

In Scotland the basic rate definition includes those paying the 21% intermediate rate.

The easiest way to claim is online, although self-assessment taxpayers can apply when submitting their tax return. It is the lower-income spouse or civil partner who applies. Once made, the claim remains in force for future tax years unless subsequently cancelled. It is possible to backdate claims for four years, so a claim made by 5 April 2024 can include 2019/20.

New pitfall for pensioners

Next tax year the new State pension will increase to £11,502. Pensioners who have transferred 10% of their personal allowance will find from this April there will be insufficient allowance remaining to cover the State pension income, which means for 2024/25 they will face a small tax bill.

To avoid the hassle of making the tax payment, the marriage allowance claim could be cancelled. However, this could waste just over £1,000 of personal allowance. Contact us if you think you may be affected.