Did you know that HMRC allows some couples to increase their Personal Tax Allowance from £12,570 to £14,064 through Marriage Allowance? This can provide a tax rebate of up to £1,242, boosting your household's tax-free income.

Here’s how it works and how you can take advantage of it.

How to Boost your Household's Tax-Free Income

The Marriage Allowance lets couples in a marriage or civil partnership transfer £1,260 of the lower earner’s Personal Allowance to the higher earner.

This reduces their taxable income and can increase your combined tax-free income to £14,064 for the year.

What is the Marriage Allowance?

You could save £252 a year in tax and potentially more by backdating your claim for up to four years, resulting in a tax rebate of up to £1,242.

How Much Can You Save?

Here’s a quick example:

🔹 Your income is £11,500, meaning you pay no tax as it's below your Personal Allowance of £12,570.

🔹 Your partner earns £20,000, so their taxable income is £7,430 (£20,000 minus their Personal Allowance).

When you claim Marriage Allowance, you transfer £1,260 of your Personal Allowance to your partner. This reduces your partner's taxable income by the same amount.

You now pay tax on £190, while your partner only pays tax on £6,170.

As a couple, your combined taxable income is reduced, saving you approximately £214 in tax.

How Does It Work?

You may be eligible for Marriage Allowance if:

✅ You are married or in a civil partnership.

✅ One partner earns less than £12,570 (the current Personal Allowance).

✅ The higher earner’s income is between £12,571 and £50,270.

If you or your partner were born before 6 April 1935, you might benefit more from Married Couple’s Allowance instead.

You can apply for Marriage Allowance online through HMRC’s website. However, if you have additional income such as dividends or benefits from your job, it's best to call HMRC’s Income Tax helpline for tailored advice.

Need help with tax planning or filing? Contact The Tax Faculty for expert advice and a free consultation!

Eligibility and Ways to Apply

Capital Gains Tax Expertise: The Tax Faculty LLP Managing Partner Charles Tateson Named UK Capital Gains Tax Advisor of the Year 2023

The Finance Monthly Taxation Awards recognises the achievements of tax professionals from around the globe.

Winning such an award is no small feat. It is a reflection of hard work, extensive knowledge, and an ability to navigate the intricacies of the UK tax system.

Read more about Charles and the award here.

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