Marriage Allowance is a valuable tax benefit in the UK that allows eligible couples to save on their tax bill each year. By transferring a portion of the personal allowance from one spouse or civil partner to the other, couples can effectively reduce their overall tax liability. This detailed guide explains how Marriage Allowance works, who qualifies, how to claim it, and how to maximise your tax savings.
What is Marriage Allowance?
Marriage Allowance is a government scheme designed to help couples where one partner earns less than their personal allowance (£12,570 for the 2025/26 tax year) and the other partner is a basic rate taxpayer (earning between £12,571 and £50,270). It allows the lower-earning partner to transfer up to 10% of their personal allowance (£1,260 in 2025/26) to their spouse or civil partner, effectively reducing the higher earner’s tax bill by up to £252 annually.
Who Can Claim Marriage Allowance?
To qualify for Marriage Allowance, the following criteria must be met:
- You’re married or in a civil partnership (unmarried couples living together cannot claim).
- One partner has income below the personal allowance threshold (£12,570 for 2025/26).
- The other partner is a basic rate taxpayer (earning between £12,571 and £50,270) and not liable for the higher or additional rate of tax.
It’s important to note that the Marriage Allowance is only beneficial if the lower earner’s income is below the personal allowance and the higher earner is a basic rate taxpayer.
How Much Can You Save?
By transferring £1,260 of unused personal allowance from the lower earner to the higher earner, the couple can reduce their overall tax bill by up to £252 per tax year. The saving is calculated as 20% of the transferred allowance (£1,260 x 20% = £252). This reduction is applied as a tax credit to the higher earner’s tax liability.
How to Apply for Marriage Allowance
Marriage Allowance can be applied for online through the HMRC website, or by phone or post if preferred. Here’s how to do it:
- Online: The easiest way to apply is online through the HMRC Marriage Allowance application service. The lower-earning partner initiates the application by providing details about themselves and their spouse or civil partner, including National Insurance numbers and income details.
- By Phone: Call HMRC on 0300 200 3300 and follow the prompts to apply for Marriage Allowance.
- By Post: If you prefer, you can write to HMRC requesting a Marriage Allowance transfer. Include your details, your spouse’s details, and both National Insurance numbers.
Applications can be made at any time during the tax year or up to four years retrospectively, allowing you to backdate your claim and receive refunds for previous years if eligible.
Receiving the Marriage Allowance Benefit
Once approved, the Marriage Allowance is applied through the recipient’s tax code. HMRC adjusts the higher earner’s tax code to reflect the increased personal allowance, reducing the amount of tax deducted from their salary via PAYE. If the higher earner completes a Self-Assessment tax return, the adjustment is made through the return process, and any refund due is credited accordingly.
Backdating Your Claim
One of the significant benefits of Marriage Allowance is the ability to backdate your claim by up to four tax years. This means that if you were eligible but didn’t claim in previous years, you can receive refunds of up to £1,008 (4 years x £252 per year). To backdate, simply indicate the years you want to claim when applying online or specify this in your written application to HMRC.
Impact on Benefits and Other Allowances
Marriage Allowance does not affect other tax benefits or allowances, such as Child Benefit, tax credits, or Universal Credit. It is a straightforward way to reduce your tax liability without impacting your entitlement to other government benefits.
Tips to Maximise Marriage Allowance Savings
- Review your income annually to ensure continued eligibility, especially if circumstances change (e.g. pay raises or job changes).
- If you’re nearing the higher rate threshold (£50,270 for 2025/26), be mindful that Marriage Allowance cannot be claimed if your income exceeds this limit.
- Take advantage of the four-year backdating rule to claim refunds from previous years if you were eligible but didn’t apply.
- Inform HMRC promptly if your circumstances change (e.g. divorce, separation, or becoming a higher rate taxpayer) to avoid overpayments or incorrect tax codes.
What Happens If Circumstances Change?
If your circumstances change (such as divorce, income changes, or your partner becoming a higher rate taxpayer), you must inform HMRC. Marriage Allowance can be stopped at any time, and any overpaid tax relief will need to be repaid. Staying on top of your eligibility ensures you remain compliant and avoid unexpected tax bills.
Marriage Allowance vs. Married Couple’s Allowance
Marriage Allowance is different from Married Couple’s Allowance, which is available only if one partner was born before 6 April 1935. Married Couple’s Allowance offers a different form of tax relief and cannot be claimed at the same time as Marriage Allowance. It’s important to ensure you’re applying for the correct allowance based on your eligibility.
Conclusion
Marriage Allowance is a simple yet effective way for couples to save money on their tax bills. By transferring a portion of the personal allowance from the lower earner to the higher earner, couples can reduce their overall tax liability by up to £252 each year—and even more if backdating applies. Understanding the eligibility criteria, how to apply, and how to manage your claim ensures you make the most of this valuable tax relief. If you think you’re eligible, take action today to start saving on your taxes as a couple!
