Marriage Allowance Explained: Are You Eligible to Claim?

Introduction

Thousands of married couples in the United Kingdom are missing out on tax savings via the Marriage Allowance. If you are married or in a civil partnership, you might be able to cut your household's tax bill by hundreds of pounds a year. Getting to know the finer points of the Marriage Allowance and whether you can claim it will ensure that you have not left money on the table.

In this easy-to-understand guide, we'll talk about the Marriage Allowance, how it works, eligibility criteria, and practical application for claiming. Whether you've just gotten married or have been together for years, you will learn how this simple yet powerful allowance can keep a few pounds in your pocket.

What Is the Marriage Allowance?

It is a tax relief granted by HM Revenue and Customs to married couples or civil partners. One partner is allowed to transfer part of their personal tax allowance to the other, thus minimizing the couple's overall tax liability.

For the 2024/2025 tax year, the personal allowance stands at £12,570, out of which up to £1,260 can be passed onto an individual's spouse or civil partner, potentially permitting income tax savings of up to £252 annually.

Are You Eligible to Claim the Marriage Allowance?

To be eligible for Marriage Allowance, you need to satisfy these conditions:

You must be married or in a civil partnership.
One partner must earn less than the personal allowance (£12,570).
The other partner must be a basic rate taxpayer, earning between £12,571 and £50,270.

Example Scenario:

Let's look at Sarah and Tom. Sarah works part-time and earns £10,000 per annum, which is lower than the personal allowance. Tom looks at his calendar while working full-time and earning €30,000 per year and comfortably fits into the basic rate tax band.

Sarah transfers £1,260 of her unused allowance to Tom. Tom's personal allowance rises effectively to £13,830, and the amount of tax paid decreases: savings go to £252 dollars per annum.

How to Claim Marriage Allowance

You can easily claim the Marriage Allowance either online or by phone through HMRC.

Claiming Steps:

Check your eligibility via the Marriage Allowance calculator.
Have the National Insurance numbers for both parties handy.
Fill out the application on-line via GOV.UK Marriage Allowance.
Alternatively, apply by calling HMRC at 0300 200 3300.

Once accepted, tax codes will automatically be amended; the transfer will carry on year by year unless changes to eligibility occur.

Frequently Asked Questions on Marriage Allowance

Can I Backdate a Claim?

Yes. You can backdate it for up to four years, and if you have been eligible for previous years but did not claim, you may receive a lump sum rebate.

Does It Affect Other Benefits?

No. Claims made by Marriage Allowance don't affect benefits such as Universal Credit or pensions. The only thing that Marriage Allowance claims would impact is your income tax liabilities.

What Happens If Circumstances Change?

You must notify HMRC of any change in circumstances, for example, to income or for divorce. The allowance transfer ceases automatically when eligibility ceases.

How to Maximise Your Marriage Allowance

To ensure the full benefit of the Marriage Allowance:

Always check if your earnings are under the personal allowance each tax year.
Inform HMRC of any gross income changes or changes in marital status as soon as possible.
Hold back from unpaid backdated claims for too long.

Other Resources and Tools

Additional tools and resources that could bolster your finances include the following:

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Get a personalised view of your finances by using our salary calculator.

Conclusion

The Marriage Allowance is something that goes much under used and could bring married couples or civil partners in the UK a way to trim down their tax bills. Through the transfer of unused personal allowance, eligible couples could bag a few substantial tax breaks each year, stretching their overall performance.

Don't let this go to waste-get checked and apply today to be able to take in all the financial benefits this allowance offers.