Married Tax Allowance – claim up to £1,150

Married Tax Allowance – claim up to £1,150

There are over 2.4 million couples who may miss out on a very easy tax allowance, worth £250 this tax year.

 

How Does it work ?

If you are married or civil partners, where one partner is a non-taxpayer and the other is a basic-rate taxpayer then you can claim the marriage tax allowance.

This allows you to transfer 10% of your personal allowance (currently £1,250) to your spouse or civil partner, if they earn more than you.

Example:

Part-time Peter works just enough and earns £5,000 at his local fish and chip shop. His full personal allowance for the year is £12,500, so he has plenty of spare allowance to transfer £1,250 to his wife.

Peter’s wife, full-time Fiona, is a software developer. She earns £35,000 and is a basic-rate taxpayer. Her personal allowance increases by £1,250 to £13,750 when Peter chooses to make his transfer.

So she has an extra £1,250 which she would’ve paid tax on at 20%, but is now tax-free, so she’s £250 up (20% of £1,250)

*source Money Savings Expert

This means a saving of £250 tax in the 19/20 tax year.

How Much Could I Claim ?

If your claim is successful, it will lower the higher earner’s tax bill for the tax year, but you can also backdate your claim to 2015/16 tax year if you are eligible.

This means that if you claim BEFORE 5th April 2020 and backdate the maximum 4 years, you could get a rebate £1,150. 

2015/16 – £212 (deadline Sunday 5 April 2020)

  • 2016/17 – £220
  • 2017/18 – £230
  • 2018/19 – £238
  • 2019/20 – £250

 

As this allowance started in 2015/16, if you don’t claim it by April 2020, you’ll lose that first year, so our advice would be to claim NOW.

 

Make sure you do this via the official HMRC website https://www.gov.uk/apply-marriage-allowance

 

Lee Gardner has been providing retirement and investment advice to clients for nearly 30 years.

info@gardnerfm.co.uk

Office 01564 732770

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