Marriage tax allowance allows you to transfer 10% of your unused personal allowance (the amount you can earn tax-free each tax year), to your spouse or civil partner, if they earn more than you.
In April 2015, the UK Government introduced Marriage Tax Allowance, a new income tax break for married couples and civil partners. The tax scheme allows some couples to share their personal tax allowance and potentially save on the amount of Income Tax they pay.
(Personal Tax Allowance is the amount a person can earn without being subject to income tax)
What is the Marriage Tax Allowance?
The HMRC Marriage Allowance Claim lets the lower earner within the marriage or civil partnership transfer 10% (£1,257*) of their unused Personal Allowance to their higher-earning partner.
Doing this can significantly reduce the higher earner’s income tax bill.
What is the Personal Marriage Tax Allowance for 2021/22?
In 2021/22, you can save up to £252* in Personal Marriage Tax Allowance.
An Example To Help You Understand Marriage Allowance Tax:
Your income is £10,500 and your Personal Allowance is £12,570, so you don’t pay tax.
Your partner’s income is £20,000 and their Personal Allowance is £12,570, so they pay tax on £7,430 (their ‘taxable income’). This means as a couple you are paying Income Tax on £7,430.
When you claim Marriage Allowance you transfer £1,257 of your Personal Allowance to your partner. Your Personal Allowance becomes £11,313 and your partner gets a ‘tax credit’ on £1,257 of their taxable income.
This means you still do not pay tax, and your partner now will only pay tax on £6,250. As a couple you benefit, as you are only paying Income Tax on £6,173 rather than £7,430, which saves you £252 in tax every year.
What Is The Marriage Tax Eligibility Criteria?
Marriage Allowance Rebate is an elective tax break, meaning that eligible couples will not receive the tax break unless a claim is made. If no claim for Marriage Allowance is made, the taxpayer’s entitlement is simply written off, and the funds are retained by the Government.
To qualify for HMRC’s Marriage Tax Allowance:
· You need to be married or in a civil partnership
· One partner must earn under your personal allowance, which is £12,570 for the 2021/22 tax year
· The other must earn between £12,571 and £50,270. This is the requirement for the UK (excluding Scotland). If you live in Scotland, the other must earn between £12,571 and £43,662 (pay the starter, basic or intermediate rate).
· You both need to have been born after 6 April 1935.
You cannot claim Marriage Tax Allowance if you’re living together but you’re not married or in a civil partnership.
It will not affect your application for Marriage Allowance if you or your partner:
· Are currently receiving a pension.
· Live abroad – as long as you get a personal allowance.
Claim Your Marriage Tax Allowance With Us
Claim your Marriage Allowance with us today.
Click on the link below to claim your Marriage Tax Rebate or to check if you are eligible. At Claim My Tax Back, We Offer a No Win/No Fee guarantee. Don’t miss out!
Common FAQs About Marriage Tax Allowance:
Can Marriage Allowance Tax Be Backdated?
Yes, you can backdate your HMRC Marriage Allowance Claim.
Applying for the Marriage Allowance Rebate through our online application will allow you to automatically backdate your claim to include any tax year starting April 2017 for which you are eligible for Marriage Allowance.
If your partner has passed away since April 2017, HM Revenue & Customs’ guidance states that you will generally still be able to apply for Marriage Allowance, provided the eligibility criteria were met at the time. If your partner was the lower earner of the two of you, then the person responsible for managing their tax affairs will need to apply.
What is the Marriage Tax Allowance For Different Tax Years?
The marriage tax allowance for the tax year 2021/22 is £252. However, you can get a rebate by back-claiming for up to four years. The amounts for each year are:
· 2017/18 – £230
· 2018/19 – £238
· 2019/20 – £250
· 2020/21 – £250
· 2021/22 – £252
This means that if you claim now and backdate, so you get this year’s, and all the previous years’ allowance, you’ll get up to £1,220.
The 2021/22 rebate amount of £257 would be applied to your current tax year liability as a credit and you will be paid money owed to you for previous tax years as a cheque.
Does The Tax Code Change When You Receive Marriage Allowance?
The tax code of the partner receiving the Marriage Allowance will usually change to ‘M’. This shows they’re getting Marriage Allowance from their partner. If the partner who transferred their Personal Allowance is employed, their tax code will change to ‘N’. This can take up to 2 months to take effect
Do You Need To Apply For Marriage Allowance Every Year?
You do NOT have to apply every year. Once your application has been successful, your personal allowance will be transferred automatically to your partner every tax year until one of you cancels the marriage allowance or you inform HMRC that your circumstances have changed, eg, because of divorce, wage increase, or new job pushing you into a higher-rate tax threshold or death.
Once you’ve applied, you (or your partner) will get the extra allowance either:
· By changing the higher earner’s tax code, which can take up to two months, OR
· When they file their self-assessment tax return.
How Can You Stop/Cancel Your Marriage Tax Allowance?
You MUST cancel the Marriage Tax Allowance if any of the following apply:
1. Your relationship or civil partnership ends – because you have divorced, ended (‘dissolved’) your civil partnership, or legally separated.
2. Your income changes either through a wage increase or a new job and you’re no longer eligible.
3. You no longer want to make a Marriage Tax Claim You can cancel your marriage allowance by writing directly to HMRC or by calling 0300 200 3300