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Marriage allowance: are you missing out on this tax perk?
Married couples and civil partners could cut their tax bill for 2023-24 by up to £252
Love is usually reward enough for tying the knot, but couples who say 'I do' could also save up to £252 in tax by claiming marriage allowance.
HMRC says that March is the most popular time to apply for the tax perk. In the same month last year, 70,000 couples rushed to make a new claim before the end of the financial year on 5 April.
The benefit allows husbands, wives and civil partners to transfer part of their tax-free personal allowance to their higher-earning partner. Many couples, however, may not realise that they are eligible and are missing out. To help, Which? explains how marriage allowance works and how to apply.
What is marriage allowance and who can apply?
Marriage allowance saves couples money by allowing the lower or non-earner to reduce the amount of tax their partner pays by transferring up to £1,260 (or 10%) of their personal allowance to their spouse or civil partner.
The higher-earning spouse, who must be a basic-rate taxpayer, will then receive a tax credit equivalent to the amount of personal allowance that has been transferred to them. This is deducted from the amount of tax they would usually have to pay.
Scottish income tax has different bands and rates; you can claim marriage allowance if the higher-earning partner's salary falls between the Scottish starter, basic rate or intermediate rate of tax, so essentially the higher-earning partner's salary would have to be less than £43,662.
To be eligible, you must also be born after 5 April 1935. If one or both of the couple are born before this date, you should claim the 'married couple's allowance' instead.
Unfortunately, there 's no current data on how many married couples are eligible for marriage allowance in 2023-24 or how many missed out on the perk last year, but HMRC told Which? that more than 2.1 million people claimed in 2021-22.
- Find out more: marriage allowance explained.
How much can a couple save?
You can reduce your annual tax bill by up to £252 by claiming marriage allowance. Although, remember that it's not something HMRC will pay direct into your bank account – it's a tax relief. This means the higher-earning partner on basic rate will be taxed on a smaller proportion of their salary, with the extra money received whenever they get paid.
If you've only just realised you're eligible and missed out on applying for the perk in the past, don't worry. You can backdate your claim for up to four years, meaning you could receive a lump-sum payment of more than £1,000.
It's worth noting that because the personal allowance was set slightly lower before 2021-22, at £12,500, the maximum marriage allowance savings in the years before then was £250 – that's £2 less.
If you do't qualify for marriage allowance, you may be able to claim married couple's allowance, which can benefit those who are married or in a civil partnership where at least one partner was born before 6 April 1935. This tax break reduces your tax bill by 10% of the allowance you're entitled to, which is a minimum of £364 in 2022-23.
- Find out more: tax reliefs explained.
How do you make a claim?
Applying for marriage allowance is surprisingly quick and easy. The first step is to check if you're eligible, and couples can find out by using HMRC's online marriage allowance calculator.
If you fit the criteria for making a claim, then you can go ahead and apply online. Make sure you have details of you and your partner's National Insurance number ready.
You can also claim by printing out and filling in the marriage allowance form MATCF and sending it to the address on the application. Alternatively, self-assessment customers can apply when they file their tax return.
Are there any other married tax perks?
Marriage allowance isn't the only tax benefit to being in a couple.
Married couples can also benefit from inheritance tax laws, which allow spouses to make use of each other's tax allowances without the need for special tax planning.
Capital gains tax can also be reduced, by transferring assets into joint names and effectively pooling both partners' tax-free CGT allowances.
