For a whole variety of reasons these days many couples choose to co-habit, rather than marry. There are advantages to this set up, not only avoiding the cost of an expensive wedding. However, it appears the view of the government is that couples should be encouraged to get married. Why else would they introduce the ‘generous’ Marriage Allowance?
In its simplest form, the Marriage Allowance enables you to transfer £1,190 of your Personal Allowance to your husband, wife or civil partner, potentially saving your other half up to £238 in the tax year.
To benefit from this allowance, the lower earner must have a taxable income of £11,850 (the personal allowance for the year ended 5 April 2019) or less.
An important point to note is that you can currently backdate your claim to any applicable tax year from 5 April 2015 to date and claim a tax refund for the applicable years.
In order to qualify for the Marriage Allowance, you must be married or in a civil partnership, have income less than £11,850 (or the equivalent personal allowance for an earlier tax year that you are eligible to claim for) and your partner’s income must be above the personal allowance, but below £46,350 (or the equivalent basic rate threshold for an earlier tax year that you are eligible to claim for).
The process for applying for the Marriage Allowance is very simple and can be dealt with over the phone with HMRC or through an online application.
So clearly there are no more excuses and it’s time to get down on one knee. Perhaps avoid mentioning the Marriage Allowance before you ask the question though!
If you would like to discuss this issue further, please contact your acountant on 01273 701200.
Author: Luke Thomas, Director, Plus Accounting
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