Married Couples Tax Allowance – what is it worth to me?

From 6 April 2015, a tax allowance whereby couples can share part of their annual income tax allowance with be available to some people. Registration has already opened and if successful in their application, married couples could save up to £212.00 per year.

As of April 2015, an individual will be able to earn up to £10,600.00 before they have to pay income tax. If one partner earns less than that amount, they can transfer up to £1,060.00 of their annual allowance to their partner provided that other partner is a basic rate tax payer. If the other partner earns more than £42,385.00 per year then as of this April, they will be classified as a higher rate tax payer meaning that they cannot benefit from the transfer of a tax allowance.

The rules only apply to people who are either married or in a civil partnership, so cohabiting couples will not benefit, regardless of what they both earn or how long they have lived together. Also, both parties must have been born on or after 6 April 1935 to qualify. As above, the partner transferring their unused personal tax allowance must be earning less that £10,600.00 per annum and the person receiving the benefit of the transferred tax allowance must be a basic rate tax payer earning between £10,600.00 and £42,385.00 per annum.

It is thought that around 4 million couples will be able to benefit from the transfer of an allowance which, in the first year, can save a couple up to £212.00.

For couples who successfully register for the married couples tax allowance, the person receiving the benefit will have their tax code altered to show that they have a larger personal allowance and if they are employed then they will see from their wage slip that they are having less of their earnings taken by way of income tax before they receive their net pay.

To register for a married couple’s tax allowance you should visit www.gov.uk/marriage -allowance. You will then be contacted by HMRC about making a formal claim.