When you are a married couple who is residing in the UK, this is imperative for you to have an understanding of what is marriage allowance and how it works for your benefit. Also, the good news is that these allowances increase every year. This increased amount is usually applied from the 6th of April in every tax year. To be eligible for the marriage allowance, you will have to be either in a civil partnership or in a married relationship as a basic requirement. In some of the cases where one of the partners is earning an amount of money which is less than £12,570, however, the other partner is a basic taxpayer, and the personal tax allowance can be shared.
Moreover, this is important to mention here that there are several examples of couples who are actually eligible for this marriage allowance and tax break. However, because of the lack of knowledge many of them do not claim this allowance. You are even allowed to backdate the claims for a period of four years. Further in this comprehensive guide, you will be able to gather information about the basics. This involves the discussion of what is marriage allowance, how it works, what is the eligibility criteria to make a claim, and what is the difference if your spouse has died.
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What is Marriage Allowance Tax in the UK?
When you are living in a civil partnership or you are married, one of the partners is allowed to transfer the amount of a certain level to the other partner. The amount limit is the figure £1,260. In the tax year 2022-2023, this amount is 10 percent of the basic amount from your personal allowance. The basic amount of personal allowance refers to the amount of money that is tax-free for you. This method of transfer is able to reduce the amount of tax from your partner’s bills.
How Does Marriage Allowance Work?
In the case of being a non-taxpayer in the UK, which means your earnings are under the limit of personal allowance but your spouse is in a position of paying the basic tax rate, you will be allowed to transfer an amount of 10% that is £1,260 from your personal allowance. This will make your partner earn an amount of £12,570 + £1,260 = £13,830. You and your partner are saving an amount of £252 within a tax year. To get this kind of benefit, you and your partner will have to be born after the date of April 6, 1935. This will let you enjoy a potential amount of tax break that is £1,242.
What are the Eligibility Criteria to Claim Marriage Allowance in the UK?
There are certain criteria to meet when you are planning to claim the marriage allowance. Some of the important features are outlined below:
- You will have to be in a married relationship or in a civil partnership to be eligible for making a claim.
- You are not under tax liability because your earning is less than the amount of personal allowance and you do not have to pay income tax.
- In the tax year 2022-2023, the amount of personal allowance is £12,570.
- If your partner is paying the basic rate of tax, he will not come under the obligation of paying the additional or the higher rate of tax.
- The income of your partner must be between the figure £12,571 and £50,270 when they are at the stage of receiving the marriage allowance.
Moreover, one of the partners who is earning more than the other will get an additional amount of £1,260, other than the basic personal allowance amount. This comes under the marriage allowance as well. In case of the transferring allowance to the other partner, the chance of getting reduced tax bills is higher as well. This scenario is not the same as the personal allowance.
How to Claim Marriage Allowance in the UK if your Spouse is Demised?
The set of rules and regulations related to the marriage allowance changes a bit when one of the partners dies. Now if one of the partners dies after the year 2016, the other partner is still capable of taking the benefits by applying for the marriage allowance. You can even get to apply for the backdate to a certain limit of four years. Once you are done checking that you are eligible according to the criteria and decide to apply for the marriage allowance, you can directly get in touch with the government over a phone call. Be informed about the call charges. You will have to follow the time limit that is given to make a call. You can do it on Monday to Friday between the hours of 8:00 AM to 6:00 PM in the evening.
The Bottom Line
Now that we have gathered a fair amount of information about what is marriage allowance, we can bring the discussion towards wrapping up. You can not deny the benefits that the marriage allowance can let a couple enjoy, however, the criteria are to be met before you plan to enjoy. Otherwise, your claim will not be accepted by the government and there will be no use in getting into such chaos. One of the partners is even allowed to transfer 10% of the marriage allowance amount. We hope these few minutes of reading will help you to develop a better understanding of how to pay taxes and what is marriage allowance in the UK.
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Disclaimer: All the information provided in this article on what is marriage allowance in the UK, including all the texts and graphics, is general in nature. It does not intend to disregard any of the professional advice.