On the 6th April 2015, the Government introduced the Marriage Allowance for the benefit of husbands, wives and civil partners by allowing the lower earning spouse to transfer up to 10% of their unused personal allowance to their partner for that year.
In order to claim the allowance, the following criteria apply:
- you are married or in a civil partnership
- you do not earn anything or earn less than the personal allowance for the year in which the claim is made (currently £11,500), and
- your partner's income falls into the basic rate tax band.
It is currently possible to backdate an initial claim to any tax year since 5 April 2015, or a maximum of two backdated years from 5 April 2018, if:
- you were eligible for the relief in the backdated years
- relief hasn’t already been claimed in those tax years
The potential saving per couple is dependent on the personal tax allowance for the specific tax year but is currently worth up to £230. It is worth noting that if the transferor of the allowance dies during the tax year that their transferable allowance is still transferred but the transferor does not lose any of their personal allowance for that tax year.
If you would like to know if the Marriage Allowance applies to you, or would like to make a claim, further information can be found on HMRC's website.
There are several options available for married couples and those in civil partnerships, depending on circumstances, to structure their tax affairs in efficient ways. If you would like to know how Gepp & Sons can help you please contact Marc Dorsett on 01245 228146.
This is not legal advice; it is intended to provide information of general interest about current legal issues.