HMRC has urged 700,000 couples to claim the Marriage Allowance in order to save tax.
Introduced in April 2015, the Marriage Allowance enables spouses to transfer a fixed amount of their personal allowance (PA) to their partner. The option is available to couples where neither pays tax at the higher or additional rate. If eligible, one partner will be able to transfer 10% of their PA to the other partner. In 2019/20, taxpayers are able to transfer £1,250 (compared to £1,190 for the 2018/19 tax year).
For those couples where one person does not use all of their PA, the benefit will be up to £250 in 2019/20 (20% of £1,250).
Commenting on the allowance, Mel Stride, Financial Secretary to the Treasury, said:
‘It is encouraging to see so many people taking advantage of the tax relief.
Married couples who are yet to sign up for this great scheme – you too can benefit – it is quick to register, and any backdated allowances will be paid as a lump sum.’
The Marriage Allowance is available throughout the UK; to qualify, the higher earning partner must pay tax at the basic rate (in Scotland that includes the starter, basic or intermediate rate).
Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.