This is a relatively new allowance which first became available
in the year 2015/16.Unlike other reliefs it is a transfer of excess allowances from
one spouse to another. But the rules are tightly drawn:
- It cannot be claimed by those already
entitled to the married couple’s
allowance. So this eliminates anyone
born before 6th April 1935.
- It cannot be claimed if one spouse is
paying tax at higher rate. So this
eliminates anyone with an income
exceeding £50,000 (£46,350 in
- It can be claimed where one spouse
has income below £12,000 and the
other spouse is paying tax at basic rate.
How does it work?
If both spouses are under self-assessment then the claim
should be made by the spouse with the lower income at the
foot of page TR5. The allowance will then be deductible in
the other spouse’s tax calculation or PAYE code.Alternatively go to Marriage Allowance on the HMRC
website and follow the instructions.
What is the tax relief?
In 2019/20 the allowance is £1,250 which results in a tax saving of £250.This figure will increase as the personal allowance moves up with inflation.
Can I go back to earlier years?
Yes, claims can be backdated four years. The years 2015/16,2016/17, 2017/18 and 2018/19 should be reviewed.
Who is likely to benefit?
Frankly, not many couples will qualify. In a typical situation
where the wife is at home bringing up the family the husband
is paying tax at higher rates. Uncommon situations do arise
from time to time. Examples:
- Taxable income falls as a result of reduced selfemployment income.
- Taxable income falls as a result of a significant pension
payment or gift aid donation.
- Taxable income falls on account of a redundancy
Remember – even if you don’t qualify there could be others in
the family who do.
For more info, give us a call on 01442 202650