If you and your other half are married, or set to be married, have you looked into marriage allowance?
We’ll be taking a look into this perk of being married, who is eligible, and how to apply.
What is Marriage Allowance?
Marriage Allowance lets you transfer £1250 of your Personal Allowance to your partner – husband, wife, or civil partner This then reduces their tax by up to £250 in the tax year (which runs from 6th April to 5th April the next year).
Am I Eligible For Marriage Allowance?
Who is eligible for Marriage Allowance? Obviously, you need to be married or in a civil partnership, and cohabiting couples aren’t eligible without this – but are there other criteria?
To be eligible, the lower earner must normally have an income below your Personal Allowance which is usually £12,500, meaning you do not pay income tax. This works out well for parents with one full time and one part time earner (usually to accommodate childcare)!
The higher earning partner should also pay Income Tax at the basic rate, which usually means their income is between £12,501 and £50000.
It is worth noting that when you transfer some of your Personal Allowance to your husband, wife or civil partner you might have to pay more tax yourself, but you could still pay less as a couple overall! It won’t affect your marriage allowance if one of you are receiving a pension, or one of you live abroad as long as you still get a personal allowance.
How do I Apply For Marriage Allowance?
Annoyed that you didn’t apply sooner? Well, this can be backdated to include any tax year since April 2015! Brilliant.
If either of you gets other income (dividends or savings, etc) you might need to work out who should claim this allowance. You can call the Income Tax helpline if you’re unsure and they’ll guide you through the process.
We hope that this has helped!
Love from Katie & Team BBY. Xx