The Marriage Allowance was introduced over two years ago, yet most people who are eligible have not claimed the allowance. Could you be due a tax repayment of up to £432?
The Marriage Allowance, introduced in April 2015, allows eligible individuals to transfer 10% of their personal allowance to their spouse or civil partner. You can find out more about how it works here.
If you choose to use the Marriage Allowance, you could reduce your spouse or civil partner’s tax bill by up to £212 in 2015/16 and up to £220 in 2016/17. So, if you are eligible but haven’t claimed yet, you could be missing out on a tax repayment of up to £432.
Who is eligible to claim Marriage Allowance?
In general, the transfer of 10% of the personal allowance is allowed and worthwhile where:
- one of the spouses has little income and is therefore not using their personal allowance
- the other spouse does not pay tax at the higher or additional rate.
If you are an employer, we recommend you inform your employees about the Marriage Allowance. As we have passed the end of a tax year fairly recently, couples should have a good idea as to whether they qualified in 2016/17. For couples who make a successful application, changes to the personal allowances will be backdated to 6 April 2015.
In future years, the allowance will transfer automatically to the spouse until either of the couple cancels the Marriage Allowance – which means an annual potential reduction in tax bills of over £200. If circumstances change, couples can also cancel the allowance online.