Marriage Allowance – What You Need To Know

Marriage. What a wonderful thing. Two souls that were always meant to be together tie the knot, say their vows and live happily ever after. It gets better, though, because if you’ve married or entered a civil partnership recently you may be unaware of another benefit: the marriage allowance.

If one of you earns less than £10,600 per year, you could keep more of the money your earn. In fact, it can be worth up to £212 per annum, which isn’t to be sniffed at.

The marriage allowance came into force in April 2015, therefore you’d be forgiven for not being aware of its existence. Put simply, by combining your tax free allowance with your partner’s income, you can retain more of the money you earn.

How did the marriage allowance come about?

If you cast your mind back to 2010, you may remember prime minister David Cameron claiming that he was going to “end the couple penalty for all couples” and “bolster marriage”. Although we’ve had to wait six years for any action on those words, the marriage allowance is the tax relief Cameron was referring to. For many, it’ll be a welcome boost, although some experts are questioning whether or not it is worthwhile.

How does the marriage allowance work?

If a spouse or civil partner has an unused amount of personal allowance, they can transfer up to 10% of their allowance to their other half. That equates to a maximum of £1,060 under current UK taxation. However, it doesn’t matter what they have left – be it £3,000 or £5,000 – because they can only ever transfer £1,060, hence the controversy.

What if I have less than £1,060 of unused personal allowance?

You can still claim, but it gets rather complicated. This relates to the fact that you have to transfer £1,060 to take advantage of the marriage allowance; it can’t be any more or any less. Therefore, if you have less than that amount available, you’ll likely end up exceeding your personal allowance and subsequently pay tax on the amount you’ve gone over. You’ll still both be better off, but it won’t be by much.

How do I claim the marriage allowance?

The first thing to do is apply. Happily, the government have set up a specific website for that very purpose: gov.uk/marriageallowance.

The process is quick; you’ll find out almost immediately via email if you are eligible. It doesn’t matter when you apply either as you’ll get the full financial benefit for the whole year. This is providing that you apply before 5^th April.

It’s worth noting you can also apply by phone, by ringing 0300 200 3300.

What information will I need?

Good news – not much at all. You simply need you and your partner’s national insurance numbers and proof of identity for the partner who will be transferring the allowance.

Is it worth it?

£212 per year may not sound like much, but every penny counts. Given the relatively simple application process, we think it makes sense to apply if you are married, in a civil partnership and your earnings stack up to the requirements above.

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