Free money from the government - Are you missing out on £1000s of marriage tax? @ gov.uk
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Free money from the government - Are you missing out on £1000s of marriage tax? @ gov.uk

351
Found 10th Feb 2016
Are you one of 3.7 million couples missing out on the £212 marriage tax allowance? Only 8% of couples eligible for this new allowance have claimed it. Don't be one of them – this guide shows if you're eligible and how to apply.

You can apply directly online using this linkgov.uk/mar…nce?

What is it? It's a new way for couples to transfer a proportion of their personal allowance (the amount you can earn tax-free each tax year) between them. It may not sound a lot, but £212 is not to be sniffed at if you're eligible.

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.
One of you needs to be earning £10,600 or less (not including any of your £5,000 tax-free savings interest).
The other one of you needs to be a basic-rate taxpayer (couples with a higher- or additional-rate taxpayer aren't eligible for this allowance).
Both of you must have been born after 6 April 1935.
Yes, that's us – so how does it work? The partner who has an unused amount of personal allowance can transfer £1,060 of their allowance to the other (so basically 10% of the full allowance). It doesn't matter if they have £3,000 of their allowance left unused or £5,000; they can only transfer £1,060.

This is how it works:

Part-time Peter works just enough and earns £5,000 at his local fish and chip shop. His full personal allowance for the year is £10,600, so he has plenty of spare allowance to transfer £1,060 to his wife.

Peter's wife, full-time Fiona, is a software developer. She earns £35,000 and is a basic-rate taxpayer (higher-rate tax starts at £42,385 for most). Her personal allowance increases by £1,060 to £11,660 when Peter chooses to make his transfer.

The increase in her personal allowance means that she'll save an extra £212 (the 20% tax she would have had to pay).

Ah, but what if I have less than £1,060 of unused personal allowance – can I still take advantage? Yes, you can, but it's a bit more complicated. This is because you have to transfer £1,060 to take advantage – nothing more, nothing less. This means that if you've less than £1,060 left of your allowance, you could see yourself exceeding your personal allowance. If that happens, you'd end up paying tax on the amount you've gone over. There will still be a net gain for the two of you, just not that much.

This is how it works:

Part-time Peter decides to put in a few extra shifts at the chippy and his earnings go up to £10,000 a year. His full personal allowance for the year is £10,600, so by transferring £1,060 to his wife, he's left with a personal allowance for the year of £9,540.

Full-time Fiona still gets the full personal allowance increase of £1,060 to £11,660 when Peter chooses to make his transfer.

However, Peter now earns £460 more than his personal allowance, meaning he'll pay basic-rate tax for the year of £92. Meanwhile, Fiona gets an increase in her personal allowance of £1,060, so she'll get to keep an extra £212 (the 20% tax she would have had to pay).

The net benefit to Peter and Fiona is £120 – good, but not great.

This year, the basic personal allowance for most is £10,600, meaning that's how much you can earn in the tax year before paying tax. So only if the lower earner in the couple earns less than £9,540 (£10,600 less £1,060) will they get the full £212 basic-rate tax saving.

OK, so how do we actually do this in practice? To take advantage of the scheme you need to first apply. After going through the application process you'll be notified immediately if you're eligible for the allowance via email (you can apply over phone too - 0300 200 3300).

It doesn't matter when in this tax year you apply, as you'll get the full financial benefit for the full tax year as long as you apply by 5 April 2016.

If you forget to put in your application by 5 April 2016 you can apply for it retrospectively for the 2015/16 tax year. The marriage allowance only came into effect from 6 April 2015, so you can't claim for any years prior to that. However in the future you can apply for up to four years in the past (although 2015/16 will be the furthest tax year you can go back).

It works, as Corinne tweeted us: "Just contacted HMRC and transferred my marriage allowance to my husband. Easy! £212/year better off. Thanks."

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.

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What other information do I need? To apply for the marriage allowance online, you'll need both you and your partner's national insurance numbers.

The partner who is transferring their personal allowance will also need to confirm their identity. For this you'll need either the last four digits of the bank account that your child benefit, tax credits or pension is paid into, the last four digits of a bank account that pays you interest or details from your P60.

If you struggle with the online application then you can apply by phone on 0300 200 3300. If you need to apply by phone, you won't be disadvantaged and, assuming you pass the eligibility criteria, will be able to get the marriage allowance.

Only the person who is transferring their allowance needs to verify their identity – whether through the online or telephone service.

I'm having difficulties applying online – what can I do? Some people have reported difficulties applying online. If this is you, call HMRC on 0300 200 3300 for help.

What happens if we've applied and then cease to be eligible midway through the tax year? This could happen if, for example, one partner stays at home to look after the kids but later goes back to work and uses up their entire personal allowance, or the partner who was basic-rate taxpayer becomes a higher-rate taxpayer.

HMRC has said that if someone received a transferred allowance through their PAYE tax code during a year and their circumstances change so that they cease to be eligible, it'll calculate the tax underpaid as part of the normal end-of-tax-year process and collect it by adjusting the PAYE code for the following year.

Put simply, even if you are successful in applying this tax year, you or your partner could see your allowance being reduced in the 2016/17 tax year.

What happens if my partner dies? If your partner dies after you've transferred £1,060 to them, their estate will be treated as having an increased personal allowance while your own personal allowance will revert back to what it was before the transfer.

If your partner transferred some of their personal allowance to you before they died, then your own personal allowance will stay at the higher level until the end of the tax year while their estate will be treated as having the lower amount.

What happens if we divorce or dissolve our civil partnership? Assuming you want to cancel the allowance, then you must contact HMRC.

Do we have to apply every year? No. Your personal allowance will transfer automatically to your partner every year until one of you cancels the marriage allowance or you inform HMRC that your circumstances have changed eg, because of divorce, employment pushing you into a higher rate tax threshold or death.

I was born before 6 April 1935 – why can't I get this? This is because there's a different, better allowance available to you, that HMRC is phasing out. If one of you is over 80, then you could be eligible for the married couple's (& civil partner's) allowance. This could give you a reduction on your tax bill of up to £835. However, if you're an unmarried couple (even if you're living together), then you get nowt.

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351 Comments
"Only 8% of couples eligible for this new allowance have claimed it. Don't be one of them"
I claimed mine months ago,it's only about £4 a week.
monitor1

I claimed mine months ago,it's only about £4 a week.




that 4 litres of petrol to work and back.
Edited by: "flashjmp" 10th Feb 2016
lol all the cold voters in there 40s and still living with there mum
do you both have to be working to this?
what about the not adding to the population tax credit???
On the Gov.uk website it say: one of you was born before 6 April 1935... is it before or after 1935?
Thanks for the find, research and detail. Heat for the effort alone!

I'm the only one that works in my household, as my wife has the toughest job of all - looking after the household and kids! So are we still eligible?
monitor1

I claimed mine months ago,it's only about £4 a week.



That's not an incentive to get married is it X)
masif1

Thanks for the find, research and detail. Heat for the effort alone! I'm … Thanks for the find, research and detail. Heat for the effort alone! I'm the only one that works in my household, as my wife has the toughest job of all - looking after the household and kids! So are we still eligible?




well im a full time student and my wife works part time and we are ?
what if one of the partners is not working at all. ?
Lolaheart

On the Gov.uk website it say: one of you was born before 6 April 1935... … On the Gov.uk website it say: one of you was born before 6 April 1935... is it before or after 1935?




after otherwise everyone would be 90+
Yes this may spark a debate. But the gov' is willing to give £212 to married couples, yet only 8% have claimed!? Surely they must have set aside this money. If everyone claimed the total would be £784,400,000! Why do they not use this money to reduce tuition fees, or reinstate school meals etc...?
reindeer333

Yes this may spark a debate. But the gov' is willing to give £212 to … Yes this may spark a debate. But the gov' is willing to give £212 to married couples, yet only 8% have claimed!? Surely they must have set aside this money. If everyone claimed the total would be £784,400,000! Why do they not use this money to reduce tuition fees, or reinstate school meals etc...?



Dam right well said. cant believe they stopped school meals.
Even if you are not working you get a tax free allowance. So yes, the other parter can claim.
reindeer333

Yes this may spark a debate. But the gov' is willing to give £212 to … Yes this may spark a debate. But the gov' is willing to give £212 to married couples, yet only 8% have claimed!? Surely they must have set aside this money. If everyone claimed the total would be £784,400,000! Why do they not use this money to reduce tuition fees, or reinstate school meals etc...?



you would need a LOT more than that for either of those things.
flashjmp

lol all the cold voters in there 40s and still living with there mum



Probably because its not available to the vast majority of married couples........
Where is the deal? Should be in misc
monitor1

I claimed mine months ago,it's only about £4 a week.



So over £200 'better' off. First world problems.

reindeer333

Yes this may spark a debate. But the gov' is willing to give £212 to … Yes this may spark a debate. But the gov' is willing to give £212 to married couples, yet only 8% have claimed!? Surely they must have set aside this money. If everyone claimed the total would be £784,400,000! Why do they not use this money to reduce tuition fees, or reinstate school meals etc...?



That's not how it works unfortunately. They don't have spare money to set aside. Stuff like this is introduced with the full knowledge that hardly anyone will claim. What they will do though, is when needed, they will magically be able to "transfer" the unclaimed billions to other less well intentioned needs.
monitor1

I claimed mine months ago,it's only about £4 a week.

reindeer333

Yes this may spark a debate. But the gov' is willing to give £212 to … Yes this may spark a debate. But the gov' is willing to give £212 to married couples, yet only 8% have claimed!? Surely they must have set aside this money. If everyone claimed the total would be £784,400,000! Why do they not use this money to reduce tuition fees, or reinstate school meals etc...?



the 1%
flashjmp

lol all the cold voters in there 40s and still living with there mum


their*, their*

Don't be bitter about people voting cold, they're only internet points and have no real value
benjammin316

Where is the deal? Should be in misc



That's probably true but I'd say it should be were most of us will see it, which is Deals.
How many of us look at Misc on a regular basis?

Thanks OP. It doesn't benefit me but I'm all for info on how the average Joe can pay less tax to the government.


Edited by: "Zuulan" 10th Feb 2016
Zuulan

Thanks probably true but I'd say it should be were most of us will see … Thanks probably true but I'd say it should be were most of us will see it, which is Deals. How many of us look at Misc on a regular basis?



Free money from the government is defo a deal. like when do they ever give free money
Does anyone want to marry me?

mpc4000

what about the not adding to the population tax credit???



​having kids is not compulsory for marriage.
flashjmp

lol all the cold voters in there 40s and still living with there mum



lol at anyone getting married in the year 2016.
The "Get Deal" Link is going to the wrong place!

The OP's text. copied verbatim from MSE ->
http://www.moneysavingexpert.com/family/marriage-tax-allowance

refers to the Married Allowance -> https://www.gov.uk/marriage-allowance-guide

Which is totally different from the Married Couples Allowance the OP linked to -> https://www.gov.uk/married-couples-allowance

Who said Government benefits / tax allowances were confusing!
monitor1

I claimed mine months ago,it's only about £4 a week.


Ungrateful troll.
Nothing to do with in work or not.Everybody gets a set personnel allowance every year.£11000 for 2016.
If your eligible for this then its a great saving on tax your already paying
RufusA

The "Get Deal" Link is going to the wrong place!The OP's text. copied … The "Get Deal" Link is going to the wrong place!The OP's text. copied verbatim from MSE ->http://www.moneysavingexpert.com/family/marriage-tax-allowancerefers to the Married Allowance ->https://www.gov.uk/marriage-allowance-guideWhich is totally different from the Married Couples Allowance the OP linked to ->https://www.gov.uk/married-couples-allowanceWho said Government benefits / tax allowances were confusing!



will update why is there two lol
Shouldn't the op credit the fact the info is from MSE?
reindeer333

Yes this may spark a debate. But the gov' is willing to give £212 to … Yes this may spark a debate. But the gov' is willing to give £212 to married couples, yet only 8% have claimed!? Surely they must have set aside this money. If everyone claimed the total would be £784,400,000! Why do they not use this money to reduce tuition fees, or reinstate school meals etc...?



Except not everyone is of a legal age to get married or in a marriage and then you need to deduct people earning over £42k. I'd hazard a guess the actual total is only a mere £300-400m
Liam1990

... and then you need to deduct people earning over £42k.



Why deduct people earning over £42K? They still have a personal tax allowance!

The whole tax system needs to be simplified , it runs to thousands of pages and no one understands it.................
flashjmp

well im a full time student and my wife works part time and we are ?


As long as one of you are eligible to pay tax you can claim it, otherwise what would be the point?
"I'm owed this" mentality in action.
I claimed this few weeks ago my husband works full time, I don't work as I am disabled and get contribution based ESA, was really easy and quick to do but be warned
my Oh has now been put on Emergency Tax code and paid 3x normal amount and any adjustments will be calculated in April... which if I had known I would have waited as we have been left short
Seems to be a bit of confusion as to how this works. To simplify:

Most people have a tax code of 1060L. This means they can earn £10600/year without paying tax on it.

If you are a housewife, or out of work, or earning less than £10600 (i.e. not taking full advantage of your tax free amount) you can transfer 10% of your tax code which is 106L (i.e. £1060 tax free) from one partner to another.

So the low or non-earner has a tax allowance of 954L (£9540 tax free a year) while the main earner gets a tax code of 1166L (can earn £11660 before paying tax).

End result - less tax paid.

PS. You know your tax codes have changed into this scheme because they'll now end with a M or N instead of L. And the figure is calculated from the extra £1060 tax free - 20% of £1060 = £212 saved in tax.





Edited by: "Yas" 10th Feb 2016
Yas

Why deduct people earning over £42K? They still have a personal tax … Why deduct people earning over £42K? They still have a personal tax allowance!



Because half way through that block of text it states you have to be paying the basic rate of tax to be eligible which is up to £42k something.
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