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Am I entitled to Married Couple’s Allowance?

This allowance is only available to married couples or civil partners where at least one of the two was born before 6 April 1935.

It is not an allowance against income like the Personal Allowance and the Blind Person’s Allowance, but is actually an allowance or reducer against the tax you owe. Although the figures look impressive – £9,075 – it is only given at 10% of its face value. So it only deducts £907 from your tax bill.

As an example, Ewan is married and has total pensions income of £14,500 a year. He was born in 1934, so is entitled to Married Couple’s Allowance. We work out his tax liability:

Income £14,500
Less Personal Allowance £12,500
Taxable income £ 2,000

 

Tax due on £2,000 @ 20% = £ 400, BUT his Married Couple’s Allowance of £907 wipes that out. In fact there is unused allowance of £507, but unfortunately he cannot ask for that back.

What he can do though is transfer the surplus of his Married Couple’s Allowance to his wife Kathy, (provided she is a taxpayer) so that she can apply the unused amount to her tax. Suppose the figures were something like this:

Ewan’s income £14,500 Kathy’s income £12,900
Less Personal Allowance £12,500 Less Personal Allowance £12,500
Taxable income £2,000 Taxable income £400
Tax due @20% £400 Tax due @ 20% £80

 

Clearly Ewan only needs about two thirds of the Married Couple’s Allowance to reduce his tax to nil, so he uses form 575 and transfers the unused £507 to Kathy. This wipes out her tax bill as well.

To apply, HMRC will need to know each of the spouse/partner's National Insurance number, date of birth and the date of marriage.

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