Marriage Allowance: A Tax Benefit for Married Couples and Civil Partners

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At Mitchell Associates, we are committed to helping our clients make the most of the tax benefits available to them. One such benefit that can provide significant savings for married couples and civil partners is the Marriage Allowance. In this blog, we will explain what Marriage Allowance is, who is eligible, and how you can apply for it.

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Marriage Allowance was introduced to recognise marriage and civil partnerships through the tax system. It allows one partner to transfer a portion of their personal allowance to their spouse or civil partner, potentially reducing their overall tax bill. Specifically, from the tax year 2015-16 onwards, qualifying couples can transfer 10% of their personal allowance to their partner. This can result in a tax saving of up to £250 per year.

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To be eligible for Marriage Allowance, both partners must meet certain criteria. Firstly, you must be married or in a civil partnership. Secondly, the partner making the transfer must have an income below the personal allowance threshold, while the receiving partner must be a basic rate taxpayer. Additionally, neither partner can be in receipt of the Married Couple’s Allowance, and there must not be an existing live Marriage Allowance application on either account.

Applying for Marriage Allowance is a straightforward process. The partner with the lower income needs to apply online through the HMRC website. Once the application is approved, the allowance will be transferred automatically each year until you cancel the arrangement or your circumstances change.

It is important to note that Marriage Allowance can only be backdated for up to four years, so it is beneficial to apply as soon as you become eligible. Furthermore, if your circumstances change, such as a change in income or marital status, you should inform HMRC to ensure your tax affairs remain accurate.

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At Mitchell Associates, we understand that navigating tax benefits can be complex. Our team of experienced accountants is here to assist you with any questions you may have about Marriage Allowance or other tax-related matters. Please do not hesitate to contact us for personalised advice and support. We hope this blog has provided you with a clear understanding of Marriage Allowance and how it can benefit you and your partner. Stay tuned for more informative posts from Mitchell Associates to help you make the most of your financial opportunities.

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