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Legal & money

Marriage Allowance

(2 Posts)
Dinahmo Thu 25-Apr-19 12:22:14

I expect most of you know about the Marriage Allowance but for those who don't, Here is a short note.

The personal (ie tax free) allowance for the current year is £12,500. If you are married, or in a civil partnership and one person's income is less than the PA and the other is a taxpayer then 10% of the PA can be transferred from the non tax payer to their partner. If this applies in the current tax year (2019/20) you can also look at the earlier tax years, going back to 2015/16.

To get the maximum benefit the income of the non tax payer should be 90% of the PA otherwise the non tax payer, by reducing their PA may incur a tax charge. ie - income £11250 no tax charge; income £11750 charge to person transferring the allowance would be £100 and refund to their partner would be £250 so an overall saving of £150. Still worth doing!

There is a calculator on the HMRC website so that you can see if a claim is beneficial. There is also an online claim form. The explanation of how it works is easy to understand. If you find you can claim for earlier years, you may need to make a claim for each year.

You can also claim if you receive a government pension (not the state pension) from teaching or other government employment, and you live abroad you can also make the claim if it's beneficial.

Nonnie Thu 25-Apr-19 12:28:44

Good reminder. I told a friend about this a couple of years ago because she told me she didn't have enough income to pay tax. I don't think she believed me though. Martin Lewis mentioned this in a recent newsletter too.