Are you claiming Marriage Allowance to save £252 a year?

All is fair in love and war – except if you are married. In that case, you have a small advantage over your fellow couple who have spurned the aisle in favour of co-habitation.

As many as 1.8 million married couples and couples in civil partnerships have benefited from the Marriage Allowance, saving up to £252 a year in income tax.

New figures from HM Revenue and Customs (HMRC) show the tax savings from Marriage Allowance, as we celebrate the summer, often a popular time for weddings.

HMRC is sharing the figures to highlight the potential tax savings for newly married couples.

Claiming Marriage Allowance allows married couples and those in civil partnerships to share their personal allowances for income tax.

If one partner earns less than the personal allowance threshold, which is £12,570 this year tax, and the other is a basic rate taxpayer, the unused personal allowance can be transferred, leading to a tax saving.

Couples can transfer 10% of their personal allowance to their partner, or £1,260 in the 2021/22 tax year.

As a result, couples can reduce their total income tax bill by £252 a year.

It’s also possible to backdate Marriage Allowance claims for any of the previous four tax years, leading to tax savings worth £1,220.

Applying for Marriage Allowance is free. You can check your eligibility online and claim the gov.uk website.

Angela MacDonald, HMRC’s Deputy Chief Executive and Second Permanent Secretary, said:

“Marriage Allowance lets eligible couples share their Personal Allowances and reduce their tax by up to £252 a year. Nearly 1.8 million couples are already using the service – it is free, quick and easy to apply, just search ‘marriage allowance’ on GOV.UK.”

Some recent changes in circumstances can prompt a successful Marriage Allowance claim.

As well as a recent marriage or civil partnership, changes to circumstances, including one partner retiring and the other continuing to work, or a change in employment due to the pandemic, can mean Marriage Allowance becomes available.

It’s also still possible to claim Marriage Allowance if a spouse or civil partner has died since 5th April 2017, with claims available by calling HMRC.

Marriage Allowance claims are automatically renewed every year. However, couples should notify HMRC if their circumstances change.

Clare Moffat, Head of the Intermediary Development & Technical Team at Royal London, said:

“It’s great news that 1.8m married couples and civil partners have taken advantage of this tax relief by sharing their personal allowances. However, many more couples may be eligible for Marriage Allowance, especially since this can be backdated for the four previous tax years.

“This tax relief can be particularly useful when one person retires but their spouse continues to work, or when someone retires and moves from being a higher rate taxpayer to a basic rate taxpayer and their spouse does not pay tax.

“If either you or your spouse or civil partner have had a change in circumstances, it’s well worth checking if you could be eligible to claim on Gov.uk to save more money to enjoy together.”

So there you have it. Marriage does come with tax breaks plus some other very romantic benefits such as Capital Gains free gifts between spouses, Inheritance Tax Exempt gifts between spouses and my personal favourite the ability to inherit ISAs. Who says I’m not a romantic?!