Can I claim married tax allowance?
Yes you can. It just takes a little planning.
You’ll need some cash. You’ll need another reason to file. And you need to come up with a name for the account that will hold all these bits of your personal information—your marriage certificate, passport, foreign passport, Medicare card, child benefit, pension, tax credits, employment and pension savings account, etc. etc.
Write a check or money order to the Bank of England that is larger than your personal allowance (currently £10,000) and smaller than your spouse’s personal allowance (currently £12,500).
Keep a record of how much money is left after your spouse transfers over £1,060 of their personal allowance (now £10,800) to you. This is known as the marriage allowance.
If your partner transfers £1,060 of their personal allowance to you, then they only have £1,060 of their allowance left to transfer. So they only have £11,060 of their allowance to transfer.
If your partner transfers £11,060 of their personal allowance to you, then they have a total of £12,060 of their allowance that they are not using. So they have a total personal allowance of £12,060.
If your partner transfers £12,060 of their personal allowance to you, then their total personal allowance is £13,060. So their personal allowance is £11,960.
Can I claim married tax allowance?
Yes, you can. It’s just a bit more complicated. The basic principle is the one that got everybody talking in the first place: that married people should be treated as legally equal.
Butcher and his wife, for example, could earn £12,500 with their own money, while his wife gets £12,500 from her parents. This would mean she gets to keep an extra £1,250 (the 20% tax she would’ve had to pay on her £12,500 salary).
It would also mean that if one of them became unemployed, she’d get the full £12,500 tax saving she’d get if she were married to the other.
Of course, this isn’t the only way in which married people can benefit. Marriage could also be referred to as ‘settlement at last’ or ‘marriage allowance’, but it’s no more or less generous than any of the other allowances we’ve just discussed.
Instead, it’s just language used to refer to a certain type of relationship – the kind where one person earns more than the other and their income is spread over many years.
In most cases, the earner will end up with more income than their parents did, but they’ll be able to transfer any unused part of the allowance to their children.
If the parents are later killed, for example, their estate will be treated as if it were yours for the purposes of tax saving.
Can I claim married tax allowance?
You certainly can’t if you’re a non-taxpayer. That’s because being married means you have to share your husband’s income. If he were to sell his business, he’d have no choice but to give you the money he’s earned over the years and give it to you, along with a deduction for state and local taxes you pay.
As a single person, you can’t transfer any of your personal allowance, pension or other benefits, even if they’re all well-off. You can’t even claim them if your partner is in employment.
Finally, if your partner dies after you’ve transferred the £1,250 allowance to them, their estate will be treated as having an increased personal allowance (ie, less tax will be taken from the inheritance) 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, their estate will be treated as having less of it, so they’ll get a bigger transfer.
Of course, if both of you were alive and well, you’d each get to keep an extra bit of your allowance. But if one of you died, your own personal allowance will stay at the higher level until the end of the tax year, while the other’s will be reduced.
Can I claim married tax allowance?
Yes, you can. It’s just a bit more complicated.
The basic idea is to tax married couples as if they earned all of their money together, rather than as individuals. Say your spouse earns £10,000 and you earn £10,000 as a couple. Shouldn’t you be able to earn the same amount as a single person, without penalty?
Unfortunately not. The existing marriage allowance is only available if you’re married to someone who isn’t your spouse. If you break up, or if one of you marries, you can’t claim the marriage allowance either.
If you have no income, but are married, single or in a civil partnership, you can’t be denied the right to marry. This includes pensioners, widows or widowers with children.
If your partner dies after you’ve transferred the £1,250 allowance to them, their estate will be treated as having an increased personal allowance (ie, less tax will be taken from the inheritance) 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, 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.
Yes.
