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Marriage Allowance tax break

Source: HM Revenue & Customs | | 18/02/2021

If you are entitled to the marriage allowance and have not yet applied, then you could receive a payment of up to £1,188 from HMRC. HMRC used the occasion of Valentine’s Day to remind couples to make a claim.

The marriage allowance is available to qualifying married couples and those in a civil partnership where a spouse or civil partner is a non-taxpayer i.e., has an income below their personal allowance (currently £12,500). The allowance permits the lower earning partner to transfer up to £1,250 of their personal tax-free allowance to their spouse or civil partner. The marriage allowance can only be used when the recipient of the transfer (the higher earning partner) does not pay more than the basic 20% rate of Income Tax. This would usually mean that their income is between £12,500 to £50,000 for 2020-21. The limits are somewhat different if you live in Scotland.

If you meet the eligibility requirements and have not yet claimed the allowance, then you can backdate your claim. If you claim now you can backdate your claim for up to four years as well as claim for the current tax year. This could result in a total tax break of up to £1,188 for 2016-17, 2017-18, 2018-19, 2019-20 as well as the current 2020-21 tax year. The deadline for backdating an eligible claim to 2016-17 is 5 April 2021.

 

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McAllisters is a partnership trading from Paxton House, 11 Woodside Crescent, Glasgow providing accountancy and tax services and general business advice and is a member of ICAS (Registration No 0342) and an FCA exempt professional firm (No 301235). Its VAT number is 261 3019 94

McAllisters (Scotland) Ltd is a related business providing tax and business advisory services to McAllisters and its clients. McAllisters (Scotland) Ltd is registered in Scotland (Registration number SC146856). Its VAT number is 624 0564 62.

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