What is the marriage allowance?
Marriage allowance lets a lower-earning spouse or civil partner transfer £1,260 of their personal allowance to their partner, cutting the couple's tax by up to £252 a year.
What marriage allowance means
Each person has a personal allowance of £12,570, the income they can receive tax free. If one partner earns less than that, part of their allowance goes unused. Marriage allowance lets them transfer £1,260 of it to their spouse or civil partner, as long as the partner receiving it is a basic rate taxpayer.
The receiving partner gets a tax reduction of 20% of £1,260, which is £252 a year.
Who qualifies
- You are married or in a civil partnership (living together is not enough).
- The partner transferring the allowance usually has income below £12,570.
- The partner receiving it pays income tax at the basic rate, so typically earns between £12,570 and £50,270 (different bands apply in Scotland).
- Neither of you was born before 6 April 1935; older couples may qualify for the separate married couple's allowance instead.
Example
Jo works part time and earns £9,000. Her husband Chris is self-employed with profits of £32,000.
| Jo | Chris | |
|---|---|---|
| Personal allowance after transfer | £11,310 | £12,570 (plus £252 tax credit) |
| Tax payable | £0 (income still below allowance) | £252 less than before |
The couple saves £252 a year. Jo still pays no tax because £9,000 is below her reduced allowance of £11,310.
Backdating
You can backdate a claim for up to four previous tax years if you met the conditions in those years, which could produce a refund of over £1,000. Claims are made online through GOV.UK by the partner transferring the allowance, and it continues automatically each year until cancelled or circumstances change.
Why it matters for your business
For business owners, marriage allowance can matter if one partner has little income. But if you run a family company, paying the lower-earning partner a genuine salary for real work, or making them a shareholder, may use their whole allowance and save far more than £252. That has to reflect real work or genuine ownership, and the settlements rules can apply, so take advice before restructuring.
It is also worth checking each year. A change of job, a pay rise or a new business can mean one of you no longer qualifies, and claims continue automatically until cancelled, so an out-of-date transfer can lead to an unexpected tax bill.
Common questions
No. The partner receiving the transfer must pay tax at the basic rate. If they are a higher or additional rate taxpayer, the couple cannot claim marriage allowance. Check your bands before claiming, especially if bonuses or dividends could push income higher.
Their personal allowance falls by £1,260. If their income is below the reduced allowance they still pay no tax. If their income rises above it in a later year, they should cancel the transfer to avoid paying tax themselves.