In the United Kingdom, married couples and civil partners can benefit from a significant financial boost by claiming the Marriage Allowance. This tax break can reduce your tax bill by £252 per year but also offers the possibility of a lump sum payment of up to £1,000.
In this article, we will guide you through the details of the Marriage Allowance, eligibility criteria, and how to check if you qualify for this financial perk.
The Marriage Allowance is a tax relief scheme by the UK government to help married couples or civil partners save money by allowing the lower or non-earner to reduce the tax their partner pays. It allows one partner to transfer a portion of their unused personal allowance to their spouse or civil partner, reducing their overall tax liability.
In essence, most individuals in the UK have a Personal Allowance, which typically amounts to £12,570 – the income threshold on which they are not required to pay taxes. The Marriage Allowance allows the partner with the lower income to transfer up to £1,260 of their Personal Allowance to their husband, wife, or civil partner. By doing so, they can effectively reduce their partner's tax bill by up to £252 annually (April 6 to April 5 of the next year).
Furthermore, for eligible couples, there's an additional benefit to the Marriage Allowance. They have the option to backdate their claim for the previous four tax years. This means they can receive a lump-sum payment exceeding £1,000, providing them with a significant financial boost.
To be eligible for the Marriage Allowance, there are certain criteria that both you and your partner must meet:
In Scotland, your partner must pay the starter, basic, or intermediate rate of income tax, typically indicating an income range between £12,571 and £43,662.
It's worth mentioning that your application for the Marriage Allowance won't be affected if you or your partner are currently receiving a pension or living abroad, provided you are still eligible for a Personal Allowance. But if either you or your partner were born before 6 April 1935, you might want to apply for the Married Couple’s Allowance instead. However, you cannot claim both Marriage Allowance and Married Couple’s Allowance simultaneously.
Before applying, it's essential to confirm that you meet the eligibility criteria mentioned earlier. Use the eligibility checker on the HMRC’s Marriage Allowance calculator to do this.
If you meet the requirements, you can apply online through the government's official website. You'll need some essential information, such as your National Insurance number and proof of identity.
Once approved, the partner transferring their allowance will receive a reduced tax bill for the current tax year. In addition to the annual reduction of £252, there's also the potential for a lump sum payment of more than £1,000.
In addition to the Marriage Allowance, there are several other tax benefits to consider when you tie the knot in the UK. Here's a quick overview of some of these benefits:
These tax benefits can vary based on individual circumstances, such as income, assets, and residency status. Therefore, it's advisable that married couples should seek professional advice from a tax expert or financial advisor to maximize these opportunities and ensure compliance with tax regulations.
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Getting married is complicated. Courtly simplifies the process and provides everything necessary to get married online.get married