Income tax on your pension
Married couple's allowance
By Ian Robinson
Article 2 of 3
Married couple's allowance
If you're married or in a civil partnership and one of you was born before 6 April 1935, you may be entitled to married couple's allowance (MCA). Find out how MCA works here.
MCA won't increase the amount of income you can receive before you pay tax. Instead, as a 'restricted' allowance, it reduces your tax bill by 10% of the allowance you're entitled to.
- If you receive the minimum allowance of £3,260 in the 2017-18 tax year, your tax bill would be reduced by £326.
- For the 2016-17 and 2015-16 tax years, a lower £3,220 minimum allowance applies, which would reduce your tax bill by £322.
How the married couple's allowance works
MCA only applies if one or both of the couple were born before 6 April 1935.
- For the 2017-18 tax year, the maximum MCA is £8,445
- For the 2016-17 and 2015-16 tax year, the maximum MCA was £8,355.
However, if your income is above a certain limit, married couple's allowance is reduced by £1 for every £2 of additional income.
Lower and upper income limits for married couple's allowance
The table below shows the lower and upper earning limits between which you receive some MCA.
If your income falls below the lower limit, then you'll receive the full MCA. If your income falls between the lower and upper limit, you will receive some married couple's allowance, but not the full amount.
If your income is above the upper limit shown you'll only receive the minimum MCA.
The recipient of MCA is normally the husband. However, if you married or became civil partners on or after 5 December 2005, the allowance is given to the partner with the higher income (and is also reduced by reference to their income).
|Upper and lower limits for higher age-related married couple’s allowance|
|Age of recipient||Age of spouse or civil partner||Lower limit 2015-2016||Upper limit 2015-2016||Lower limit 2016-2017||Upper limit 2016-2017|
|Under 66||Under 81||n/a||n/a||n/a||n/a|
|Under 66||81 or over||27,700||£37,970||27,700||£37,970|
|66 to 79||Under 81||n/a||n/a||n/a||n/a|
|66 to 79||81 or over||£27,700||£37,970||£27,700||£37,970|
|81 or over||Any age||£27,820||£38,090||£27,700||£37,970|
If your tax bill is too low to use up all of your married couple's allowance, you can transfer the unused amount to your partner.
To transfer MCA, tick the relevant box on your tax return after the end of the tax year, or contact your tax office if you don't normally complete a return.
Although they don't qualify for MCA, married couples born after 1935 are able to transfer £1,150 of unused personal allowance (Marriage transferable tax allowance) in 2017-18. For 2016-17 the figure was £1,100.
If you're set to earn less your personal tax allowance in 2017-18 (£11,500), you can transfer unused allowance to your partner so they have less income tax to pay, provided they're a basic-rate taxpayer. If those earning less than £10,350 (£11,500-£1,150) transfer £1,150 allowance to their partner, they will save £230. Those earning above £10,350, but below £11,500 can still transfer £1,100 of allowance, but will become liable to pay tax on any income in excess of £10,350. Their partner still makes a tax saving of £230, but the extra tax they pay reduces the overall level of saving made by the couple.
Maintenance relief and married couple's allowance
Married couples and civil partners can claim maintenance allowance, which acts to reduce your tax bill if you're making maintenance payments to your ex-partner.
To be eligible for this, you or your ex-partner must have been born before 6 April 1935 and the maintenance payments you make must be under a legally binding agreement.
Your tax bill will be reduced by the lower of:
- 10% of £3,260 for the 2017-18 tax year (10% of £3,220 for 2016-17) or
- 10% of the amount you've actually paid.
- Last updated: March 2017
- Updated by: Tom Wilson