The marriage allowance
The marriage allowance came into force on 6 April 2015 and allows lower earning couples to share part of their personal tax-free allowance. The marriage allowance is available to married couples and those in a civil partnership where a spouse or civil partner doesn’t pay tax or doesn’t pay tax above the basic rate threshold for income tax (i.e. one of the couple earns less than £10,000 in 2016-17). There is a different marriage allowance for those born before 6 April 1935.
The allowance allows the lower earning partner to transfer up to £1,100 (2015-16: £1,060) of their personal tax-free allowance to a spouse or civil partner. The marriage allowance can only be used when the recipient of the transfer doesn’t pay more than the basic 20% rate of income tax. This could result in a saving of up to £220 for the recipient (20% of £1,100) or around £18.33 a month.
The take-up of the allowance was less than expected in the last tax-year. However, couples that were also eligible for the allowance last year can backdate their claim to 6 April 2015 and claim back up to a further £212. An application for the marriage allowance can be made online or by telephone. The application must be made by the non-taxpayer who is transferring their allowance. To benefit as a couple, the non-taxpayer needs to earn less than their partner and have an income of £11,000 or less.