How to claim the new marriage allowance and save up to £212 in tax

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.

https://www.gov.uk/marriage-allowance

Please contact the office on 0131 220 0152 if you want to discuss the new marriage allowance in more detail.

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