A new tax allowance is available from 5th April 2015 for married couples and those in a civil partnership.
But to claim the allowance, one partner must have total taxable income of less than £10,600 in the 2015/16 tax year. Total income includes employment income, pension income, rental income, and money you receive from bank interest and share dividends.
If both partners have income above £10,600, then the Marriage Allowance cannot be claimed.
How It Works
From April, anything you earn up to £10,600 will be tax free. Up to £1,060 or 10% of this allowance can be transferred from a low income partner to a higher income partner.
Anything you earn between £10,601 and £42,385 will be taxed at 20%. If your spouse or partner earns say £7,000 per year, they have £3,600 of unused tax free allowance. Of this they can transfer the full £1,060 to you. This will mean your tax free allowance increases to £11,660.
The maximum tax saving is 20% of £1,060 or £212.
What if the ‘High Earner’ is a 40% taxpayer?
The Marriage Allowance cannot be transferred to anyone with income above £42,385 (a 40% taxpayer).
How Do I Apply for the Marriage Allowance?
You can register via the following link.
Please contact the office on 0131 220 0152 if you want to discuss the new marriage allowance in more detail.