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What Is a Married Persons Tax Allowance

14th April, 2023

A marriage allowance is a valuable tax benefit that can save eligible couples money. In 2023, it will continue to provide financial relief to married couples and civil partners, helping them maximise their tax efficiency.

This article explores what marriage allowance is, how it works, who can apply, and when it may not be the best option. At Haggards Crowther, we can also assist you in navigating the complexities of tax allowances.


What is the Marriage Tax Allowance?

Marriage Allowance, often referred to as Married Persons Tax Allowance, is a tax allowance provided by the UK government to eligible couples. It allows one partner to transfer a portion of their unused personal allowance to their spouse or civil partner, reducing the tax liability of the recipient.


How Does the Marriage Tax Allowance Work?

In 2023, the Marriage Allowance allows for the transfer of up to £1,260 (assuming the full standard Personal Allowance of £12,630). This means that the partner with the lower income (earning less than the personal allowance) can transfer a portion of their allowance to the higher-earning spouse or civil partner. The recipient can then earn an additional £1,260 before paying income tax.


Who Applies for Marriage Tax Allowance?

The partner who is the non-taxpayer (earning less than the personal allowance) is responsible for applying for marriage allowance. The application can typically be done online through the HM Revenue and Customs (HMRC) website.


Can We Still Claim If One Partner Is Unemployed?

Yes, even if one partner is unemployed and not earning an income, you may still be eligible for marriage allowance. As long as one partner is a non-taxpayer and the other is a basic-rate taxpayer, you can make the claim.


What About If One Partner Is Self-Employed?

Self-employed individuals can also claim Marriage Allowance, provided they meet the eligibility criteria. The key factor is the partner’s tax status, not their employment type.


When to NOT Apply for Married Persons Tax Allowance

While marriage allowance can be advantageous, there are situations when it might not be the best option.

  • If both partners are in the same tax bracket (e.g., both are basic-rate taxpayers), there may be no tax advantage to transferring allowances.
  • If one partner’s income is close to exceeding the higher rate tax threshold, transferring allowances could push them into the higher rate tax bracket.


Haggards Crowther Can Help You

At Haggards Crowther, our team of experts specialises in tax planning and can assist you in making the most of tax allowances like marriage allowances. We can help you determine if you’re eligible, guide you through the application process, and provide personalised advice to optimise your tax situation. Don’t hesitate to reach out to us for professional assistance in managing your taxes and financial planning.