New Forest


The marriage allowance explained




More than four million married couples and 15,000 civil partners are eligible to claim a tax break worth up to £238 in 2018/19, but how do you go about it?

Marriage allowance entitlement

Whichever person doesn’t pay tax can choose to reduce their personal allowance by £1,190 in 2018/19 and transfer it to their husband, wife or civil partner.

It’s possible for the taxpaying spouse or civil partner to increase their tax-free personal allowance to £13,040 in 2018/19.

You may benefit from the marriage allowance if:

  • your spouse or civil partner has elected to reduce their personal allowance for the tax year and transfer it to you
  • you are a basic rate taxpayer in 2018/19
  • neither you nor your partner submits a claim to the married couple’s allowance (MCA) in 2018/19

You can only benefit from one tax reduction in any tax year.

Elderly exclusion

You may have noticed the exclusion of the MCA for elderly taxpayers in the list above, although this is only available to people born before 5 April 1935.


The MCA provides a potential tax deduction of between £336 and £869.50 a year, while the maximum benefit from the transfer of the marriage allowance in 2018/19 is restricted to £238.

Personal allowance

As long as you’re married or in a civil partnership with the same person for the whole or part of the tax year at the time the claim is made, you can choose to reduce your personal allowance.




This is the easiest way for us to operate the allowance for you, as it can be made when your tax return is prepared and once we know your income and your partner’s for 2018/19.

Separation and divorce

If you and your spouse or civil partner separate between the end of a tax year and the date your tax return is due, there’s a slight chance you’ll lose your eligibility for the marriage allowance.


  • divorce (decree absolute)
  • order of judicial separation
  • decree of nullity


Death of a partner

If a spouse or civil partner dies, it’s possible to make a backdated claim for the marriage allowance providing the deceased spouse or civil partner was eligible for it when they were alive.


How does it work?

Working part-time

Tom’s on an annual salary of £16,000 and is married to Isobel, who works part-time and earns £5,000 a year.

Isobel elects to reduce her personal allowance, which is transferred when Tom claims the marriage allowance. The benefit is 10% of the personal allowance rounded up to the next £10.

So the transferable amount is £1,190 in 2018/19, giving a tax saving of £238. This transfer does not impact on Tom’s national insurance contributions.

Dividends income

Dicky is a director who pays himself an annual salary of £8,000 and receives a dividend payment of £30,000. His spouse, Katie, earns £10,000 a year.

Katie elects to reduce her personal allowance, enabling Dicky to submit a claim and increase his personal allowance by £1,190.

As Dicky’s dividend income is taxed at 7.5%, the tax saved is £1,190 x 7.5% = £89.25.


Non-residential spouse

If your spouse or civil partner is a non-UK resident, but hails from the European Economic Area (EEA), an extra restriction requires the transferee’s annual income to be less than the personal allowance.

Scottish rate of income tax

Scotland introduced additional rates of income tax for 2018/19 that do not apply anywhere else in the UK, including the intermediate rate of 21% tax on income between £24,001 and £43,430.

Married couples in Scotland can continue to receive the allowance, despite the introduction of these new income tax bands.

The only noticeable difference is that the transfer of the allowance isn’t possible for income tax bands that exceed £43,430 in Scotland – despite the basic-rate threshold in the rest of the UK stretching further to £46,350.

Income from dividends and savings are not liable for the Scottish rate of income tax, so Westminster’s basic-rate threshold and 20% rate applies.


Less than a year before the UK is due to leave the EU an additional concern surrounds whether or not the UK retains membership of the EEA.

Should the UK withdraw from the EEA, the marriage allowance may be made redundant if your spouse or civil partner comes from an EEA nation.

The EEA countries comprise all 28 member states of the EU plus Liechtenstein, Norway and Iceland.

For further information on the Marriage Allowance, please contact Stacey Steele on 023 8046 1234.

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