Are you eligible for Marriage Allowance? Transferring part of your personal tax free allowance to your husband, wife or civil partner could reduce their annual tax bill by up to £250.
Margaret was part time employed and earning less than her Personal Allowance (the amount one can normally earn tax-free each tax year). Her husband John was fully employed, earning more than his personal allowance, and paying tax at the basic rate of 20%.
Claiming Marriage Allowance enabled Margaret to transfer £1,250 of her Personal Allowance to John. His personal tax free allowance increased from £12,500 to £13,750 and the amount of tax he would normally pay in the next tax year was reduced by £250. Margaret was able to backdate her claim to include all eligible tax years since 5 April 2015, which meant that the couple gained a handy tax windfall.
Are you eligible for Marriage Allowance like Margaret and John? You may be able to claim this tax allowance if you’re married or in a civil partnership. One of you needs to be a non-taxpayer, the other partner needs to be a basic 20% rate taxpayer on earnings between £12,501 and £50,000.
Claiming Marriage Allowance is straightforward and you’ll find more information on the HMRC website. Payments can only be backdated by up to four tax years, so your application for 2015/16 needs to be submitted by 5 April 2020.
© 2020 Paul J Lockey