Marriage Allowance – Can you help reduce your spouse’s tax bill?
From 5 April 2015 the government introduced the marriage allowance which allows the lower earning spouse to transfer some of their tax free personal allowance to their partner. For the 2019/20 tax year £1,250 of the personal allowance can be transferred, reducing their partners tax bill by up to £250.
The Marriage Allowance is available to married couples and those in a civil partnership where one partner doesn’t pay more than the basic 20% rate of Income Tax and the other party does not fully utilise their tax-free Personal Tax Allowance. The lower earning partner can currently transfer up to £1,190 of their personal tax-free allowance to a spouse or civil partner.
What do you need to claim?
To claim this allowance you need to meet the following conditions:
- You are married or in a civil partnership
- Your total income is below the tax free personal allowance (for 2019/20 this is £12,500)
- Your partner pays tax at the basic rate (for 2019/20 income would be between £12,500 and £50,000)
The claim to marriage allowance can be backdated to the 2015/16 tax year, therefore if you met these conditions for the last 3 years and have not yet claimed the allowance you could potentially get a tax refund of up to £687.
Whilst more than 3.5 million couples have already applied for the allowance, it is estimated that there are still a further 700,000 married and civil partnered couples, who are eligible for the allowance, but have not applied.
How can Haines Watts help?
We can ensure that going forward you make use of any tax saving opportunities to help to reduce your tax bill. We can also check to see if you are eligible for any backdated claims.
If you are unsure of whether you can claim now or should have in the past then please contact our tax department on 01379 640555. To find out more about Haines Watts Chartered Accountants in Diss visit our page here.
Our office is located on the Diss Business Park. Drop in and see us or give us a call on 01379 640555.