TAX BASICS

When And How To Claim Married Couple’s Tax Allowances?

Once you exceed your personal allowance, you need to pay the tax to the HMRC every year. However, there are a few allowances that you could receive that will reduce the tax to be paid. The married couple’s tax allowance (MCA) is one such you can claim. It does not reduce the taxable income on which you pay the tax. But instead, it is to lower an amount from your tax bill. This allowance could reduce your tax bill by between £351 and £907.50 a year. However, the level of income determines the allowance. If your income is higher than £30,200, you might not qualify for a full allowance. Only one member in the couple can claim the

What is the Eligibility to claim a married couple’s tax allowance?

You are eligible to claim for the allowance if:

  • If married or in a civil partnership.
  • If you are living with your spouse or partner.
  • One of you was born before 6 April 1935.

In case both the couple are born after 1935, then you are not eligible for MCA. However, you could be able to apply for a marriage allowance.

What are the benefits of Claiming?

The primary advantage is tax reduction. Anyone in a married or civil partnership can reduce their tax bill. For the tax year of 2020-2021, it could cut your tax bill between £351 and £907.50 a year.

If you are married or registered as a civil partnership then you will receive the allowance proportionately for the remainder of the tax year. Even if one of the pair dies or separates the allowance continues to the end of the tax year. If you are separated for reasons that are not in your control then HMRC will still consider you as living together and you are eligible for the allowance.

Transferring the Married Couple Allowance

If your income is not high to pay tax and you do not have to use the allowance then you can transfer the allowance to your spouse or civil partner.

If you want to transfer before the tax year starts then you can fill out this form. This allows you to transfer the minimum of £3,510 for 2020/21 to your spouse or civil partner from the beginning of next year.

If you want to transfer after the tax year ends since you do not have a high tax bill and can’t claim the entire allowance. You can request to transfer the balance to your spouse or civil partner by filling the form 575.

How to Claim Married Couple’s Tax Allowances?

You can claim the allowance by filling your self-assessment and completing the section for the MCA. If you do not file a self-assessment you need to contact the HMRC with the details of your marriage and civil partnership ceremony. Also, with the details of your spouse or civil partner including their date of birth.

Who Claims the MCA?

For couples married before 5 December 2005, the income used to calculate the allowance is the husbands. Whereas for any marriages after this it’s the income of the highest earner.

If you are a couple and have qualified before 5 December 2005 as mentioned it is the husband’s income that is calculated. However, a married woman can choose to have up to £1,755 for herself i.e. £175.50 off her tax. If the husband agrees she can also have the entire £351 off her tax bill.

The husband can use the remaining to reduce his tax bill. However, if it remains unused then it can be transferred to the wife.

If you are a couple and have qualified after 5 December 2005 as mentioned it is the highest earner’s income that is calculated. Just like the previous case, the other partner can choose to have up to £1,755 for themselves i.e. £175.50 off their tax. If both parties agree then the other partner can also have the entire £351 off their tax bill.

The partner entitled to the allowance can use the remaining to reduce their tax bill. However, it is possible to transfer the surplus to the other partner.

You can check out if you are eligible for the married couple allowance and how much you might receive using this calculator of HMRC.

Sidharth Bharthan Menon
CEO, taxtotal​