Published On: Fri, Aug 23rd, 2019

Can tax allowance be transferred to spouse? Some couples may save with Marriage Allowance | Personal Finance | Finance

Most people will have the standard Personal Allowance, which in the 2019 to 2020 tax year, stands at £12,500. Those with a high income may lose some or all of their Personal Allowance. In some couples, there may be one partner who is a higher earner. Meanwhile, the other may have a lower income. Should the couple be married or in a civil partnership, then they may opt to claim the Marriage Allowance.

The Marriage Allowance is a government scheme which allows a person to transfer £1,250 of the Personal Allowance to their wife, husband, or civil partner – should the latter partner be the higher earner.

This can reduce their tax spend by up to £250 in the tax year.

In order to benefit as a couple, the lower earner must normally have an income which is below the Personal Allowance.

It’s possible to calculate how much a couple could save in tax together by using’s online Marriage Allowance calculator.

Those eligible for the Marriage Allowance may be able to backdate their claim to include any tax year since April 5, 2015.

The backdated claim may be made for all years a couple was eligible – up to four years.

The amounts for each year are as follows:

  • 2015/16 – £212
  • 2016/17 – £220
  • 2017/18 – £230
  • 2018/19 – £238
  • 2019/20 – £250

This means that should one be eligible to claim the allowance now as well as a backdated claim of four years, they could make tax savings of £1,150.

The Marriage Allowance can be applied for online, by the person with the lowest income.

The changes to the Personal Allowance for successful applicants will then be backdated to the start of the tax year.

It may be that one’s tax code changes due to the Marriage Allowance.

For instance, a person who transfers the 10 per cent of their Personal Allowance to their spouse or civil partner will end up with the letter N in their tax code.

Meanwhile, those who receive the transfer of 10 per cent of their partner’s Personal Allowance will get the letter M in their tax code.

Tax relief applies to certain situations, such as pension contributions, charity donations, maintenance payments, and time spent working on a ship outside of the UK.

Some may be automatically be in effect, however it may be that some types of tax relief need to be applied for.

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