Transferring the allowance will reduce the tax bill of the higher earner by up to £220 in the tax year.
So who can apply? You, the lower earner, can transfer a proportion of your Personal Allowance if all of the following apply:
- You are married or in a civil partnership
- You don’t earn anything or your income is under £11000 (£11500 from 6/4/17)
- Your partners income is between £11001 and £43000 (£11501 and £45000 from 6/4/17)
Applications can still be made if you or your partner are receiving a pension.
The application can only be made online, but is a simple process. When HMRC have reviewed the application and found all to be in order, they will give the higher earning partner the additional personal allowances. So for example, if your partner is on the standard personal allowance code of 1100L, the revised code will increase to 1166M. The ‘M’ signifies the Marriage Allowance and the increase in the code accounts for the transfer of the personal allowances.
The personal allowance will transfer automatically every year until either spouse cancels the Marriage Allowance or circumstances change.
Details on how to apply can be found at http://www.gov.uk/marriage-allowance/how-it-works, or alternatively contact us on 03331 123456