Marriage Allowance: An Underutilised Tax Benefit for Married Couples and Civil Partnerships

The Marriage Allowance (MA) offers a potential tax break of £252 per year, yet many eligible couples aren’t claiming it. With 4.2 million couples eligible but only 1.8 million claiming, the main hurdle seems to be a lack of awareness or misconceptions about eligibility.

Understanding the Eligibility Criteria

Contrary to popular belief and some misinformation online, the eligibility for MA isn’t solely about one partner earning below the personal allowance (£12,570). The actual legislation states that neither partner should be a higher or additional rate taxpayer. This means, for instance, one partner could have an income of £18,310 (consisting of different income types like salary, interest, and dividends) and still be eligible to transfer the allowance without incurring tax.

Key Requirements for Claiming MA

To be eligible for MA, couples must meet the following conditions:

  • They must be married or in a civil partnership. It’s not necessary for them to live together, allowing for circumstances like separation or the passing of a spouse.
  • During the relevant tax year, the recipient of the allowance transfer shouldn’t be liable to tax at a rate other than the basic rate, the dividend ordinary rate, or the starting rate for savings.
  • Neither partner should be receiving the married couple’s allowance, applicable to those where one spouse was born before 6 April 1935.

Additionally, if a taxpayer has an extended basic rate band due to factors like gift aid payments or pension contributions, this band is considered when determining eligibility for MA.

How MA Works

MA isn’t a standard allowance but a tax reducer. It enables the reallocation of £1,260 of the personal allowance from one partner to the other. The claim must be for the entire £1,260, leading to a maximum tax reduction of £252.

Claiming the MA

The partner surrendering the allowance makes the claim, either by checking a box on their self-assessment tax return or by completing the MATCF form and mailing it. The recipient doesn’t make the claim directly, as there’s no provision for this on their tax return.

Enduring Elections and Time Limits

An MA claim made via self-assessment needs to be renewed annually, whereas claims made using the MATCF form become enduring, automatically carrying forward each year until cancelled. For PAYE taxpayers, the existence of an enduring MA claim is indicated by a suffix ‘N’ (transferring to a spouse) or ‘M’ (receiving from a spouse) in their tax code.

The general time limit for repayment claims is four years, including for the MA. Depending on the couple’s employment status, refunds are processed through amended tax codes, a reduced tax bill for self-assessments, or potentially by cheque. Starting February 2024, refunds can also be directed to a third party, like an agent, if necessary.

Understanding and utilizing the Marriage Allowance can provide significant tax relief for eligible couples, making it an important aspect of personal financial planning.



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