Marriage Allowance - How to Get A Tax Refund

Marriage allowance enables married couples and civil partners to keep more of their income by transferring 10% of the personal allowance for income tax from one spouse/ partner to the other. The personal allowance is the amount of income which a person can keep each year before they pay any income tax.

Marriage allowance is available where one spouse/civil partner is a non -taxpayer, with taxable income below the personal allowance of £12,570 and the other is a basic rate taxpayer, with taxable income between £12,570and £50,270 (£43,662 if resident in Scotland). By transferring 10% of the allowance, the partner or spouse with the higher income can keep £1,257 more income with no tax to pay, saving up to £252 off their annual tax bill.

Backdated Claim of up to £1,220

Couples who are eligible may also backdate a claim for marriage allowance for up to the previous 4 tax years. A couple claiming for all 4 years and the current year could earn a tax refund of £1,220 which HMRC will pay within a few weeks of the claim.  

The earnings eligibility and amount available for each tax year is:

Tax year

Lower earner income up to £

Higher earner income up to £

Amount due up to £

























Couples who are cohabiting outside marriage or a civil partnership do not qualify

Over Age 86?

Couples, where one was born before 6 April 1935, could be better off to claim Married Couples Allowance which can increase net income by between £353 to £912.50 a year.

More couples eligible due to Covid income disruption

Couples who have seen their income disrupted by furlough, unemployment and business closure should consider whether they are now eligible for this extra tax relief.

Frozen Tax Allowances Could Alter Eligibility

In the Budget on 3 March the Government announced that income tax allowances and bands would be frozen until 2026. If wage growth comes through with a recovery in the economy, some people who are now eligible for marriage allowance may cease to be so. This could arise if the lower earner’s income rises above £12,750 or the higher earner’s increases beyond £50,270. (43,662 in Scotland). Taxpayers who become ineligible must cancel the marriage allowance by contacting HMRC.

How to Restore Eligibility

Couples in this position will see the higher earner charged more tax, to cancel out the benefit of marriage allowance. However, there is a way in which those earning above the £12,570 or £50,270 (£43,622 in Scotland ) thresholds can restore their eligibility by making pension savings or charitable donations under gift aid.

Amounts saved in a pension or given to charity are deducted from income before taxable income is calculated and this can restore eligibility for those tax allowances reserved for basic rate taxpayers such as marriage allowance.

Other examples of how pension savings and charitable giving reduce taxable income and provide additional tax benefits include:

Personal Savings allowance – tax free interest on up to £1,000 a year for basic rate taxpayers, £500 for higher rate payers.

Tax Free Child Benefit- available once taxable income is below £50,099.

Student Loan Repayments – Suspended once income falls below threshold income of £27,295 ( £19,895 for Plan 1 loans and £21,000 for postgraduate loans)

Tax Free Childcare Account- Worth up to £2,000 per year to pay for childcare for each under 12 where income is below £100,000.

Personal Allowance -The tax-free band of £12,570 of income, worth up to £5,028 a year for higher rate taxpayers, whose income is between £100,000 and £125,140.

To find out more about how you may benefit from claiming marriage allowance or making pension savings or gift aid  donations to restore your eligibility for this and other tax allowances please contact your usual Aspira adviser, or email or call 0800 055 6585.

Kay Ingram                                        
Public Policy Director                                  
April 2021                        

Please remember, no news or research item is a recommendation or advice to buy. Aspira Corporate Solutions is not responsible for accuracy and may not share the author’s views. The contents of this blog are for information purposes only and do not constitute individual advice. All information is based on our current understanding of taxation legislation and regulations. The Financial Conduct Authority does not regulate estate planning, tax advice, wills or trusts.              

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