Millions of couples are missing out on a £662 marriage tax perk that most people don’t even know about.
The marriage tax allowance is open to millions of couples across the UK, but many people have never heard of it and don’t know what it is.
It is a government tax perk that was set up in April 2015 to “incentivise marriage”. In year one it was worth £212, and for the following tax year it was worth £220. For the 2017-18 tax year (which started on 6th April), the allowance is £230, but it’s backdated, meaning you can claim previous years’ allowances, which altogether gives you £662.
However, more than half of the eligible couples (around 2.4million duos) are missing out on the free cash.
The system allows couples to transfer a proportion of their personal allowance (the amount you can earn tax-free each tax year) between them.
It creates a potential saving of almost £1.4billion for people across the UK.
The are some rules and guidelines around claiming the tax. Here are some of them:
In order to qualify for the tax perk one of you must be a non-taxpayer – so, earning less than £11,500 a year – and the other must be a basic-rate taxpayer, so earning less than £45,000 a year.
You of course need to be married or in a civil partnership (living together doesn’t count) and you must have both been born on or after 6th April 1935.
According to MoneySavingExpert.com, the partner who has an unused amount of personal allowance (the non-taxpayer) can transfer £1,150 of their allowance to the other (so 10% of the full allowance).
For example, if a wife earns £10,000 a year, she can transfer £1,500 from her £11,500 personal allowance to her husband.
He could earn £40,000 and take her £1,150 allowance – boosting his own personal allowance to £12,650.
This means he gets an extra £1,150 which he would have otherwise paid 20% tax on, but is now tax-free, so he’s £230 better off (20% of £1,150).
You can apply for the marriage tax allowance using the form on the HMRC website. You’ll need both your national insurance numbers and a form of ID for the non-taxpayer.
If you face any issues applying online, you can call HMRC’s helpline on 0300 200 3300.
It must be the non-taxpayer who applies to transfer their allowance, not the other way round.
However you apply, any backdated money for previous tax years will be sent to you as a cheque and will be given to you automatically.
