Millions of UK couples could be missing out on a significant financial boost due to a little-known tax rule. The Marriage Allowance offers a potential £252 annual saving for eligible households.
What is Marriage Allowance?
The scheme allows individuals earning less than the Personal Allowance threshold of £12,570 to transfer £1,260 of their tax-free allowance to their husband, wife, or civil partner. This applies even if the recipient is a higher earner, effectively reducing their annual tax bill.
According to banking giant HSBC: "Marriage allowance is a Government scheme that allows you to transfer some of your personal tax allowance to your husband, wife or civil partner. If you or your partner has an income of less than £12,570, you may be able to benefit."
Who can claim and how?
To qualify, one partner must earn under £12,570 annually while the other is a basic rate taxpayer. The higher earner must have an income between £12,571 and £50,270 (£43,662 in Scotland) to benefit from the transfer.
The arrangement could reduce the household's tax payments by up to £252 every tax year, which runs from 6 April to 5 April the following year.
Don't miss out on backdated claims
Perhaps most significantly, couples can backdate their claim for up to four previous tax years, potentially securing a payment of over £1,000. This provision even extends to cases where a partner has since passed away.
Despite the potential benefits, it's estimated that approximately two million eligible couples across the UK have not yet claimed Marriage Allowance. Many remain unaware of this financial opportunity that could provide meaningful relief during the ongoing cost of living pressures.
The application process is straightforward and can be completed online through the government's website, requiring basic information about both partners' incomes and marriage or civil partnership status.
