Marriage. It’s about love, commitment, and apparently…tax perks! Yes, if you’re married or in a civil partnership, there’s a tax-saving opportunity that might be flying under your radar: the Marriage Allowance. It’s a straightforward way to reduce your tax bill, and with the 2025/26 tax year in full swing, it’s worth checking if you qualify.
What is Marriage Allowance?
At its core, Marriage Allowance involves transferring a portion of your Personal Allowance to your spouse or civil partner so you can optimise your tax payments as a couple. Your Personal Allowance is the amount of income you can earn before you start paying income tax.
Let me break down the steps to explain:
1. **Transfer Personal Allowance:** The lower-earning partner can transfer £1,260 of their Personal Allowance to their higher-earning spouse or partner, reducing their tax by up to £252 for the tax year.
2. **Qualification:** To benefit as a couple, the lower-earning partner must have income below the Personal Allowance threshold, which remains at £12,570 for the 2025/26 tax year.
3. **Calculate Savings:** By transferring a portion of your allowance, you might have to pay a bit more tax, but the overall tax bill as a couple could be reduced.
Here’s an example of how it works:
– Your income: £11,250, Personal Allowance: £12,570 (no tax).
– Partner’s income: £20,000, Personal Allowance: £12,570 (tax on £7,430).
By transferring £1,260 of your allowance to your partner, your income is under the remaining personal allowance (£12,570-£1,260) of £11,310, and your partner’s taxable income is reduced to £6,170. As a result, you’re collectively paying tax on a lower income, saving you £252 in tax.
| Want to reduce your tax bill? Get in touch with us to start your claim and begin optimising your finances as a couple. |
Who can apply?
Here’s the checklist for eligibility:
- You’re married or in a civil partnership (it doesn’t count if you just live together)
- One of you earns under £12,570 (the Personal Allowance threshold)
- The other earns between £12,571 and £50,270* (i.e. pays Income Tax at the basic rate)
If that’s you, congrats! You’re eligible for Marriage Allowance and have possibly been missing out on some easy money.
*Note: Different rules apply in Scotland, where your partner’s income range for eligibility is £12,571 – £43,662.
How to apply
Applying is simple and free. The lower earner (the one not using their full personal allowance) needs to apply online through the official GOV.UK site. It’s free, takes about five minutes, and once it’s sorted, it rolls over every year until you cancel or your circumstances change.
You’ll need both National Insurance numbers and maybe a strong cup of tea if HMRC’s site is temperamental, but that’s about it.
Can you claim for previous years?
Yes, you can backdate your claim, and this is where it gets interesting.
If you’ve been eligible but didn’t know about it (which, let’s be honest, is most people), you can backdate your claim for the years you were eligible to any tax year since April 5, 2019.
That could mean a significant lump sum landing in your bank account, which is not too shabby for something that takes less time than scrolling Instagram.
A note for pensioners
Good news if you’re retired, if your income is made up entirely of a state pension and it’s below the personal allowance threshold (£12,570 for 2025/26), you’re still in the running. You can transfer £1,260 to your spouse or partner without paying tax yourself.
It’s an easy way to soften the blow of rising living costs, especially if you’re already counting every penny.
A quick note for business owners
If you’re a business owner paying yourself a low salary (and topping up with dividends, like many do), Marriage Allowance could be a neat little bonus. If your income sits below the personal allowance threshold, and your partner is a basic-rate taxpayer, you’re in.
It’s one of those things that slips under the radar when you’re busy juggling clients, cash flow, and dodgy WiFi, but it’s worth checking. Because let’s be honest, saving £252 a year for five minutes of effort is a pretty good return on time.
Take the money that’s on the table!
Navigating your taxes might seem complex, but gems like Marriage Allowance prove that some strategies are both straightforward and impactful. By understanding and utilising this simple process, you and your partner can unlock substantial tax savings without breaking a sweat.
| Want to reduce your tax bill? Get in touch with us to start your claim and begin optimising your finances as a couple. |
