Marriage tax allowance: how does it work

If you're married or in a civil partnership, you may be entitled to a £1,188 tax break called the marriage tax allowance – something 2.4 million qualifying couples miss out on.

What is the marriage tax allowance?

The marriage tax allowance allows you to transfer £1,250 of your personal allowance (the amount you can earn tax-free each tax year) to your spouse or civil partner if they earn more than you.

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 if eligible.

Who can get the marriage tax allowance?

• Only people with 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 means earning less than the £12,500 personal allowance between 6 April 2020 and 5 April 2021 (previous personal allowance rates).

• The other partner needs to be a basic 20% rate taxpayer (higher or additional-rate taxpayers aren't eligible for this allowance). This means you'd normally need to earn less than £50,000 (previous tax year rates) or if you live in Scotland, £43,430 (previous tax year rates).

• You both must have been born on or after 6 April 1935 (if not, there's another tax perk).

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

How much can I get?

Marriage tax allowance for the tax year 2020/21 is worth up to £250.

And in addition to this tax year's allowance, you can also backdate your claim by up to four tax years (currently 2016/17, 2017/18, 2018/19 and 2019/20). The amounts for each year are worth up to:

2016/17 – £220

2017/18 – £230

2018/19 – £238

2019/20 – £250

2020/21 – £250

This means that if you claim for this tax year and backdate the maximum four years, you'll get up to £1,188. You'll be paid money for previous tax years as a cheque. You won't have to tick any boxes or make a special request for this as it'll happen automatically.

How the marriage tax allowance is calculated

The partner who has an unused amount of personal allowance can transfer £1,250 of their allowance to the other (so basically 10% of the full allowance). It doesn't matter if they have £5,000 of allowance left or £500, they can only transfer £1,250.

When will I get the allowance?

In most cases, the allowance will be given by adjusting the recipient partner's personal tax code. The partner who transferred their personal allowance will also receive a new tax code, if employed. If the recipient partner is in self-assessment, it will reduce their self-assessment bill.