Are You Entitled to the Marriage Allowance?

By Keith Johnston, Tax Director, Armstrong Watson

MILLIONS of couples who are entitled to a claim the marriage tax allowance are missing out on a potential tax saving of up to £250 per annum. Many couples are still unaware of this tax break for married couples and those in civil partnerships, which came into effect April 2015. More than 1.78m already benefit from the allowance but it is estimated that over two million are missing out.

The Marriage Allowance currently lets you transfer £1,250 (ten per cent) of your Personal Allowance to your husband, wife or civil partner. In order to benefit, one of you needs to earn less than £12,500 and the other must not be liable to income tax above the basic rate. Couples where one is a higher or additional rate taxpayer are not eligible for the allowance.

If you meet the conditions, then the partner earning less than £12,500 can transfer £1,250 of their Personal Allowance to the other one. Assuming that the transfer is made to someone who will fully use their own Personal Allowance and pay basic rate tax on at least £1,250 of their income, a tax saving of £250 will be made by them. You can only transfer £1,250 of your Personal Allowance even if the unused amount is greater than this. If the unused amount is less than £1,250 there will still be an overall tax saving for the couple by making the transfer but just not as much.

Once you have applied to transfer, the allowance it will remain in force for future years until you cancel it or your circumstances change.

Claims can be backdated four years to the 2015-16 tax year potentially increasing the total tax saving to £1,150. After April 5, 2020, retrospective claims will only be possible back to 2016-17, so if you haven’t claimed before now is the time to claim a tax refund from HMRC.

You can apply online at or call the HMRC helpline on 0300 200 3300.

If you’d like more information about our tax planning services, call 01609 702000 or email