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Legal & money

Marriage Allowance

(9 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.

jackfowler Wed 31-Jul-19 13:35:43

Two million couples have failed to claim their share of £1.3bn of marriage allowance cash, it has emerged.

Liz46 Wed 31-Jul-19 13:54:57

I did this a few years ago and have advised others to do it too.

starbird Wed 31-Jul-19 14:00:38

It’s a pity that it is only 10% . It would make more sense for some working mothers who barely gain anything from working after paying for child care, to have the choice to stay at home and for their partner to be able to claim all of the PA.

annsixty Wed 31-Jul-19 14:58:34

You won't get it if your partner pays tax at the higher rate.
If they go over the threshold IR ask for it back.

starbird Fri 02-Aug-19 00:34:32

I should be so lucky - a) to have a partner and b) to have one paying tax at higher rate!

Davida1968 Sat 24-Aug-19 10:34:23

I agree starbird - the "saving" you make from this Marriage Allowance (if you can use it to the "maximum") is less that £300 a year. If a person were to be given their spouse's whole tax allowance (assuming spouse is unable to use it because their income isn't big enough) then the total gain could be over £3000. (This is allowed in the USA.)

storynanny Sat 24-Aug-19 10:48:47

And don’t forget the other thing that’s not advertised well. If you look after grandchildren and are under state pension age you can claim contributions to your national insurance contributions if the parent claiming the child benefit is working
Just download a form in October and get the parent to sign it