Your questions answered by Martin Copland of Ashdown Hurrey

Martin Copland
Martin Copland

QUESTION: A work colleague has said that my partner can claim extra tax allowances because I earn less than the personal allowance. Is this correct? And if it is, what can we do to claim the extra allowances? Mrs N, Bexhill

ANSWER:

The Marriage Allowance came into force on 6 April 2015 and allows lower earning couples to share part of their personal tax-free allowance. The Marriage Allowance is available to married couples and those in a civil partnership where a spouse or civil partner doesn’t pay tax or doesn’t pay tax above the basic rate threshold for income tax (i.e. one of the couple earns less than £11,000 in 2016-17). There is a different Marriage Allowance for those born before 6 April 1935.

Marriage Allowance lets you transfer £1,100 of your personal allowance to your husband, wife or civil partner if they earn more than you.

This reduces their tax by up to £220 in the tax year (6 April to 5 April the next year).

To benefit as a couple, you (as the lower earner) must have an income of £11,000 or less.

If you were eligible for Marriage Allowance in the 2015 to 2016 tax year, you can backdate your claim to 6 April 2015. You can only transfer the set amount each year.

You can get Marriage Allowance if all the following apply:

you’re married or in a civil partnership

you don’t earn anything or your income is under £11,000

your partner’s income is between £11,001 and £43,000

If your application is successful, changes to your Personal Allowances will be backdated to the start of the tax year (6 April). HM Revenue and Customs (HMRC) will give your partner their extra allowance either by changing their tax code (this can take up to 2 months) or when they send their Self-Assessment tax return, if they’re self-employed.

The application for the marriage allowance can be made online www.gov.uk/apply-marriage-allowance or by telephone. The application must be made by the non-taxpayer who is transferring their allowance.

Your Personal Allowance will transfer automatically to your partner every year until one of you cancels the Marriage Allowance or your circumstances change, e.g. because of divorce or death.

HMRC have said the take-up of the allowance was less than expected in the last tax-year. However, as more people become aware of this allowance and they also have allowed claims to be backdated this will change considerably.

Advice

If you would like to discuss your circumstances in greater detail, Ashdown Hurrey can advise on this matter in addition to other tax, accountancy and business matters. Contact Martin Copland on 01424 720222 or email him at martinc@ashdownhurrey.co.uk.