Save tax with the marriage allowance? – Yes please!

Save tax with the marriage allowance? – Yes please!

Happy Valentine’s Day from everyone here at Mums Tax Break!


The 2015/16 tax year introduced us to the marriage allowance – Meaning that if you are a married couple and one of you earned less than the personal allowance of £10,600 you were eligible to transfer 10% of your unused allowance to your partner saving them £212 in tax.


I think I had maybe 4 or 5 clients who were able to take advantage of this, £212 doesn’t seem like a lot but hey its better than nothing (and it definitely covers the costs for a romantic valentine break away)!


So… Can I Claim?

You as an individual are eligible to apply for the marriage allowance (for the 2016/17 tax year) if the following conditions apply

–          You are married or in a civil partnership

–          You have an income of less than £11,000

–          Your partner has an income between £11,001 and £43,000


And… How much will I receive?

Personally, you as an individual won’t receive anything, instead your partner will receive the benefit.

The marriage allowance (for the 2016/17 tax year) will allow you to transfer £1,100 of your personal allowance to your partner. This will see a reduction in their tax payable of £220.

There are 1 of 2 ways your partner will receive this reduction

–          Through change of tax code if your partner is in employment, meaning they will pay slightly less tax each pay date

–          Via the self-assessment tax return if they are self-employed, meaning they will pay less tax at year end


…Is it easy to do?

Depending on your personal circumstance there are 2 ways you can claim for the marriage allowance

–          If you are self-employed you can easily do this via your self-assessment tax return by providing your partners personal information – Full name, date of birth, NI number, address and date of marriage

–          If you are employed or unemployed you can complete the online application over on the HMRC website – Apply for Marriage Allowance Here!


…What if my income increase?

If your circumstances are to change and you are no longer eligible to claim the marriage allowance you or your partner can cancel online via the HMRC website.


Ahhh I didn’t know about this! Have I missed out for last tax year?

Good news – No you haven’t! You can backdate the claim using the link above, even better news as the 2015/16 tax year has now passed instead of reducing your partners tax code HMRC will instead send you a cheque for the £212.


Just one last little point

The marriage allowance is a set transfer currently at 10% of the personal allowance for 2016/17. This means regardless of income levels you can only transfer £1,100.

If your income is above £9,900 you will trigger a small tax liability payable to HMRC as your personal allowance will be reduced to this amount after the transfer. Any profits above this amount will be taxable at 20%.

It is therefore always worthwhile discussing matters with your accountant before you consider making a claim.



Are you doing anything lovely to celebrate valentine’s day this year? Please share the love in the comments and tag your beautiful brides <3 <3