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A simple form could unlock more than £1,000 in cash – yet millions of couples are missing out. The marriage allowance is one of the UK’s most overlooked tax breaks, and if you qualify, you could not only cut this year’s tax bill but also reclaim money for missed years.
Whether one of you has retired, cut back your hours or simply earns less, it’s well worth checking. You might be entitled to a lump sum rebate of up to £1,008, plus an ongoing saving each year – and claiming is easier than many people realise.
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The marriage allowance is a simple perk that lets certain couples share their personal allowance and reduce the amount of tax that they pay on their overall income.
Alice Haine, personal finance analyst at Evelyn Partners, explains: “If one partner in a married couple or civil partnership typically earns below the personal allowance (£12,570) and therefore pays no income tax, they can transfer a portion of their allowance to their higher-earning partner – provided the recipient is a basic rate taxpayer [with income between £12,570 and £50,270].”
She says that if these conditions are met, the marriage allowance lets the non-taxpaying spouse transfer £1,260 (approximately 10% of the personal allowance) to their higher earning partner, creating a tax saving worth up to £252 a year.
This is because the basic-rate taxpayer would normally be charged 20% income tax on that portion of their income and 20% of £1,260 is £252.
The rules differ slightly in Scotland, where different rates of income tax apply. Instead, you’ll only be eligible if the higher earner pays the starter, basic or intermediate rate of Scottish income tax (with an income between £12,571 and £43,662).
Even better than enjoying an annual tax saving worth up to £252, you may also be able to claim a lump sum back worth up to £1,008.
This is because HMRC will allow you to make a backdated claim for the last four years, so long as you were eligible for each individual year (4 x £252 = £1,008).
Even if your spouse or civil partner has died, you can still submit a claim up to the year in which they died.
By claiming the marriage allowance, some couples could be £1,260 better off this year (£1,008 in cash rebate plus a £252 reduction to this year’s tax bill).
You can apply online if you don’t want to backdate your claim. But to make a backdated claim you’ll need to download the Marriage Allowance Transfer Claim Form (MATCF) from the government website, says Haine. “Both the lower earner (the transferor) and higher earner (the recipient) must complete their own sections of the form, then print the document out and sign the relevant boxes. The completed document must then be posted to: Pay As You Earn and Self-Assessment, HM Revenue and Customs, BX9 1AS.”
The MATCF lets you claim for the current tax year, plus any years that you were eligible, going back four years (currently to 6 April 2022).
Sarah Pennells, consumer finance specialist at Royal London, says: “For previous tax years, the person who received the transferred marriage allowance will get a lump sum of backdated tax saving.”
Their tax code should then be adjusted to make sure they get the benefit of the marriage allowance in the future.
Laura Suter, director of personal finance at AJ Bell, adds: “If your partner has died and you want to claim for years you were eligible when they were alive, you’ll need to call the HMRC helpline on 0300 200 3300 to discuss how to claim.”
If you’re not entitled to a backdated claim – for example your circumstances have only just changed – Pennells says it’s possible to use an online service to claim the marriage allowance.
“The fastest way for the non-taxpaying husband, wife or civil partner to apply to transfer part of their personal allowance is online. You can claim by post if you prefer - in which case you’ll both need to complete the form,” she explains.
Or, if you’re already completing a tax return, you can claim the marriage allowance through self-assessment.
Once you have qualified for marriage allowance, you’ll continue to get it each year, says Pennells.
If your circumstances change and you are no longer eligible, it’s important that you cancel it. “If you’re getting divorced or dissolving your civil partnership, then either person can cancel it. If you’re cancelling for other reasons, then the person who made the claim must cancel it. You can cancel your claim online.”
Suter says that millions of couples could be missing out on the marriage allowance.
“We know that 2.44 million people claim marriage allowance, in the latest government figures available. But HMRC estimates that 4.2 million couples would be eligible for the tax break.”
“Lots of people won’t be aware they are eligible for the marriage allowance, particularly if their circumstances have changed and it means they are now entitled to the tax break but weren’t previously.”
Haine agrees and adds: “This can include a situation where one partner retires and the other continues to work. It can also be caused by a change in job or a reduction in working hours if someone chooses to go part-time.”
Couples who have retired might be able to benefit too, if the majority of the pension income is only in one person’s name, or one of them has retired but not yet reached state pension age.
Even if you’re eligible, Haine warns that there might be some scenarios where it doesn’t make financial sense to claim the marriage allowance.
“If the lower-earning partner’s income sits just below the £12,570 personal allowance, transferring part of it could push them into paying income tax. It could still be beneficial if the higher earner’s saving outweighs the lower earner’s tax bill – but this will need to be checked.”
For example, if the lower earner’s income is just below the threshold and the higher earner’s just above it, then there is a risk that the loss of the allowance may outweigh the gain and the couple is left worse off.
She also points out that older couples – where either partner was born before 6 April 1935 – may be better off claiming the similarly titled married couple’s allowance. “This can deliver a larger tax saving of between £436 and £1,127 a year.”
You can use the government’s online tool to work out if you are entitled to the married couple’s allowance and how much you could claim.
Watch out for scam websites, designed to look just like the government website. “These often pop up and aim to trick people who are trying to make claims for tax breaks. You could end up handing over your details to scammers, and you won’t successfully claim the tax break. Make sure you’re getting information and making a claim from the official site.”
Avoid any third-party website that charges a fee to claim marriage allowance on your behalf. It’s free to claim from the government website, meaning you get to keep 100% of the benefit.
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