HMRC Confirms Marriage Allowance Tax Savings for Eligible Couples

The HM Revenue and Customs (HMRC) confirmed that eligible married couples or civil partners can increase their personal tax-free allowance to £13,830 using the Marriage Allowance. This mechanism allows a non-taxpayer to transfer 10% of their £12,570 personal allowance to a partner who is a basic rate taxpayer, potentially reducing the couple's annual tax bill by up to £252.

To qualify, one partner must earn less than £12,570, while the higher earner's income must remain within the basic rate threshold, which is between £12,571 and £50,270, or £43,662 in Scotland. Eligible individuals can backdate claims for the previous four tax years, which may result in lump sum payments exceeding £1,000.

Financial expert Martin Lewis cautioned that the eligibility threshold is strict, noting that exceeding the high-rate tax limit by even one pound disqualifies a couple. Lewis suggested that some taxpayers might qualify for the allowance by increasing pension contributions to lower their taxable income just enough to fall back into the basic rate bracket.