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If you’re married or in a civil partnership, did you know there’s a tax break you could take advantage of that may save you both hundreds of pounds? Find out more here.
If you’re married, did you know there’s a tax break that could save you hundreds of pounds? Yes, really!
It’s called Marriage Allowance, and it could cut your tax bill by more than £400 a year.
So now to the important bit - do you qualify? To find out, answer these simple questions:
1) Are you married or in a civil partnership?
2) Do you earn less than £11,000 each year?
3) Is your partner making between £11,001 and £43,000 a year?
4) Were you both born after 6th April 1935?
If you answered ‘yes’ to these four questions, you’re eligible for this tax break. So, how does it work?
Transfer your allowance
If your wife, hubby or civil partner earns more than you do, Marriage Allowance gives you the option to transfer £1,100 of your Personal Allowance to them. A Personal Allowance is the earnings threshold below which you don’t have to pay tax – and it currently stands at £11,000.
How does it work?
If you earn less than £11,000, you don’t pay tax. This means that if you earn a lot less than this, there’s a big chunk of your personal allowance that’s not used.
Rather than it going to waste, Marriage Allowance lets you transfer a portion of what you’re not using to your partner. The amount you can transfer is 10% of your Personal Allowance, which works out at £1,100 – no more, no less.
How does this benefit me?
Basically, by transferring this allowance to your partner, you’re extending their Personal Allowance, which means they can extend their non-taxable earnings. For example, rather than being taxed on every pound they earn over £11,000, they’ll be taxed on what they earn over and above £12,100.
Let’s put this simply – it means your partner will bring home more money, and less will go to the taxman.
This tax break could mean your partner saves hundreds of pounds a year – money that could boost your household budget. As a result, you could find your finances are far less stretched.
If you’re the non-taxpayer in your marriage, you can apply online to transfer 10% of your Personal Allowance. You’ll need to have you and your partner’s National Insurance numbers to hand, along with ID like a passport, current account details, P60 or some payslips.
What are you waiting for?
by Emily BancroftBack to blog home