Marriage Allowance: Tax Advantages For Married Couples

Tax Advantages For Married Couples

If marrying the love of your life isn’t reward enough, the government are willing to give married couples further tax advantages via The Marriage Allowance.

Married couples could be eligible for additional tax advantages worth up to £212 as a result of the Marriage Allowance. Carry on reading to see if you are eligible, how to apply and how much tax you could save.



What is the Marriage Allowance?

The Marriage Allowance is a scheme established by the government. It effectively allows a low paid individual to transfer some of their unused income tax allowance to their spouse or civil partner.

If you meet the following requirements, you may be eligible for the “Marriage Allowance”. The benefit is that this will allow you to reduce your income tax bill.

  • You are married or are in a civil partnership
  • One partner has income that places them in the basic rate income tax. The basic rate income tax is between £10,601 and £42,385 for the 2015/16 tax year.
  • The other partner has income under £10,600
  • Both partners were born on or after 6 April 1935.

Note: if one of you or your partner were born before 6 April 1935, then you will claim the alternative “Married Couple’s Allowance”.


Who Can Apply For The Marriage Allowance?

The application for the Marriage Allowance must be completed by the partner who earns under £10,601. This can be done on the website.

Once the application is accepted, the higher earning partner should see a change in their tax code, This will then give them an extra tax free allowance of up to £1,060.



The Marriage Allowance – An Example

John and Sarah Jones are a married couple. John works part-time and earns an annual income of £6,000 per year. Sarah work full-time and has an annual salary of £35,000.

Based on this information, the Joneses realise that they will be eligible to benefit from the marriage allowance. John applies online and is accepted for the scheme.

You can see how the transfer of £1,060 from Sarah to John effect their take-home pay calculations. Note that we have ignored NI and other salary deductions to keep the example simple:

The Marriage Allowance Example

From this, we can see that the typical couple in this position can make a saving of £212 per year on their taxes. This is definitely worth the few minutes it would have taken to fill in the online form!

Note: in this case, Sarah’s tax code would automatically change to 1166M. This means that the tax deduction would be automatically built into, and backdated for, her PAYE.


The Marriage Allowance: What To Watch Out For

There is some additional information provided by the government regarding the scheme. You may find this useful if you are in a special situation:

  • If you and/or your partner live abroad, you can get the Marriage Allowance. However, this is only if you’re eligible to pay income tax and receive the personal allowance.
  • Following a successful submission, the Marriage Allowance will transfer automatically every year until one of you cancels or your circumstances change. This could be either due to divorce or death.
  • If your partner dies after you’ve transferred your Personal Allowance to them:
    • their estate will be treated as having the increased Personal Allowance
    • your Personal Allowance will go back to the normal amount



It may not be a huge amount at £212 per year. However, the Marriage Allowance can be fairly significant for married couples who are earning fairly low salaries. Combine this with the benefits for married couples when it comes to capital gains tax and pensions and there’s suddenly more reasons (other than pressure from elderly family members) to tie the knot!

Romantic, hey?! 🙂

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