If you are married or in a civil partnership and under 88 years old, you might be eligible for a £1,260 tax benefit known as the marriage tax allowance.
Surprisingly, about 2.1 million qualifying couples overlook this opportunity despite the application process being straightforward.
Does your partner earn more than you?
The allowance allows you to transfer £1,260 of your personal allowance to them in return lowering the higher earner’s tax bill for the tax year. Your personal allowance represents the tax-free earnings permitted in each tax year, encompassing all taxable income such as salary, pensions, and other forms of income. Pensioners drawing a pension may also qualify. The allowance does have qualifying circumstances such as:
- Couples must be married or in a civil partnership. Just living together does not qualify.
- One person must be a non-taxpayer earning less than the £12,570 personal allowance between 6 April 2023 and 5 April 2024. The non-taxpayer must earn £11,310 or less to receive the full benefit.
- The second person must pay a basic 20% tax rate. Higher or additional-rate taxpayers are not eligible.
- Both parties must have been born on or after 6 April 1935.
Once you meet the criteria, you can claim up to £252 and automatically receive the tax break each year going forward negating the need to reapply. Similarly, the marriage allowance claim can be backdated for up to four tax years.
The Pierce tax team is available to speak to if you have any questions about marriage allowance and can help if you want to see if you are eligible. Contact us today.
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