Marriage tax allowance: Get a tax break worth up to £432

Are you married or in a civil partnership? If so you may be entitled to a £432 tax break called the marriage tax allowance.

The marriage tax allowance is a way for couples to transfer a proportion of their personal allowance (the amount you can earn tax-free each tax year) between them.

Who can get it?

This is the most important factor as only people with these specific circumstances will be able to apply:

You're married or in a civil partnership (just living together doesn't count).
One of you needs to be a non-taxpayer, which usually just means earning less than the £11,000 personal allowance (£10,600 for 2015/16).
The other one of you needs to be a basic 20% rate taxpayer (couples with a higher- or additional-rate taxpayer aren't eligible for this allowance). This means you'd normally need to earn less than £43,000 (£42,385 for 2015/16)
Both of you must have been born on or after 6 April 1935.

So in a nutshell one of you must be a non-taxpayer and one of you must be a basic-rate taxpayer.

How much can I get?

The marriage tax allowance started on 6 April 2015, and in year 1 was worth £212. For the new tax year starting in April 2016, it's worth £220. If you claim it now and it's backdated so many get last year's AND this year's allowance – £432.

The rest of this guide uses allowances and thresholds for the 2016/17 tax year, though as mentioned you can also claim for the 2015/16 tax year, with the rates and thresholds for that year.

How does the maths work?

The partner who has an unused amount of personal allowance can transfer £1,100 of their allowance to the other (so basically 10% of the full allowance). It doesn't matter if they have £5,000 of their allowance left unused or £500; they can only transfer £1,100.

This is how it works:

Part-time Susan earns £5,000 working at a local school. Her full personal allowance for the year is £11,000, so she has plenty of spare allowance to transfer £1,100 to her husband.

Susan’s husband Fred, is a software developer. He earns £35,000 and is a basic-rate taxpayer (higher-rate tax starts at £43,000 for most). His personal allowance increases by £1,100 to £12,100 when Susan chooses to make her transfer.

So he has an extra £1,100 which he would've paid tax on at 20% but is now tax-free, so he's £220 up (20% of £1,100).

How do we apply?

It really is very simple, and only takes a few minutes; just use the application at HM Revenue & Customs (https://www.gov.uk/apply-marriage-allowance). To do it you'll need both your National Insurance numbers, and one of a range of different acceptable forms of ID for the non-taxpayer. If there's a problem doing it via the web just call 0300 200 3300 and do it by phone.

It's worth noting you can also only apply for those years in which you both meet the criteria. So if you earned more than the £10,600 personal allowance in 2015/16, HMRC won't allow you to claim for it.

There is one very important point to make though...

It's the non-taxpayer who must apply to transfer their allowance.

If the taxpayer applies you're doing it the wrong way round and it won't work. After going through the application process you'll be immediately informed that your application has been received via email (you can apply over the phone too). If you were also eligible for the allowance in the 2015/16 tax year, you'll have to select this option as part of the application process.

Although the onus is on you to check that you're eligible, HMRC will write to inform you if you're not - although you may have to wait a few weeks.