Are you married or in a civil partnership? You might be owed a Marriage Tax Refund of up to £1,188
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Marriage Allowance Tax Refund
If you are married or in a civil partnership, you might be entitled to a tax refund for the marriage tax allowance you may not have been claiming. Millions of qualifying couples are missing out on it right now – don’t be one of them. If you meet the criteria for the allowance you will be entitled to an average refund of £900.
What is Marriage Allowance?
Marriage allowance is a tax break available to married couples and those in a civil partnership, where the lower earner of the couple can transfer up to £1,250 of their personal allowance to their partner.
The higher-earning spouse, who must be a basic-rate taxpayer, would receive a tax credit equal to the amount of personal allowance that has been transferred to them. This is then deducted from the amount of tax they would normally have to pay.
How Does Marriage Tax Work?
Those earning less than their personal allowance can transfer a maximum of £1,250 in 2020-21 to their partner’s tax allowance (this is the same amount as in 2019-20). If you do transfer your unused personal allowance, you must transfer all of it. Those who earn less than £11,250 (the personal allowance, minus £1,250), can do this without being liable to pay any tax.
In 2020-21, people earning between £11,251 and £12,499 can still transfer £1,250 of allowance, but will become liable to pay tax on any income in excess of £11,250. Their partner can still make a tax saving of £250 but the extra tax they will pay reduces the overall level of savings made by the couple.
The allowance will transfer automatically to the spouse each year unless you cancel it, or your marriage ends, either through divorce or death. If your partner has died since 5 April 2016, it is possible to backdate your marriage tax refund claim to include any tax year since 5 April 2016 that you were eligible to receive it.
What Is A Marriage Tax Refund?
The marriage tax allowance was introduced in April 2015 but many people were not aware of this at the time. Because of this, many couples did not apply for the marriage tax allowance and missed out on a lot of savings. These couples might very well be due a substantial refund for the most recent years in which they missed out.
So looking back at what you can claim, you can apply for a rebate of the personal allowance from 2017/18 and the tax years thereafter even if you weren’t aware of the possible tax relief at the time. (It is no longer possible to make a claim for the 2015/16 tax year as this now falls outside the eligible dates).
You will only get the full benefit if the person giving up the allowance is not using it AND the person receiving the tax reduction can use it.
This can result in the couples being able to make the following tax savings:
- 2019/20 tax year: the personal allowance was £12,500, meaning £1,250 can be transferred (maximum £250 tax saving).
- 2018/19 tax year: the personal allowance was £11,850, meaning £1,190 (rounded up) can be transferred (maximum £238 tax saving).
- 2017/18 tax year: the personal allowance was £11,500, meaning £1,150 can be transferred (maximum £230 tax saving).
- 2016/17 tax year: the personal allowance was £11,000, meaning £1,100 can be transferred (maximum £220 tax saving).
Can I Claim A Marriage Tax Refund?
To qualify for a marriage tax refund the following criteria must be fulfilled:
- Be married or in a civil partnership.
- At least one partner was born after 5 April 1935.
- If one or both of the couple were born before this date, you should claim the ‘married couple’s allowance’ instead.
- The lower-earning partner’s pay before tax must be less than the personal allowance. In 2020-21 the allowance is £12,500.
- The higher-earning partner’s salary must fall between £12,500 and £50,000.
- In Scotland, the thresholds for basic-rate payers are different and the higher-earning partner’s salary must be less than £43,430.
- Those claiming marriage allowance in Scotland can continue to do so at the current rate of 20%.
What Is A Marriage Tax Refund?
The marriage tax allowance was introduced in April 2015 but many people were not aware of this at the time. Because of this, many couples did not apply for the marriage tax allowance and missed out on a lot of savings. These couples might very well be due a substantial refund for the most recent years in which they missed out.
So looking back at what you can claim, you can apply for a rebate of the personal allowance from 2017/18 and the tax years thereafter even if you weren’t aware of the possible tax relief at the time. (It is no longer possible to make a claim for the 2015/16 tax year as this now falls outside the eligible dates).
You will only get the full benefit if the person giving up the allowance is not using it AND the person receiving the tax reduction can use it.
This can result in the couples being able to make the following tax savings:
- 2019/20 tax year: the personal allowance was £12,500, meaning £1,250 can be transferred (maximum £250 tax saving).
- 2018/19 tax year: the personal allowance was £11,850, meaning £1,190 (rounded up) can be transferred (maximum £238 tax saving).
- 2017/18 tax year: the personal allowance was £11,500, meaning £1,150 can be transferred (maximum £230 tax saving).
- 2016/17 tax year: the personal allowance was £11,000, meaning £1,100 can be transferred (maximum £220 tax saving).
FAQ’s
Here are some of the most frequently asked questions about marriage tax refunds:
Can Marriage Allowance Tax Refund Be Backdated?
Yes, you are able to backdate your claim for up to four years.
How Much Tax Would I Be Refunded?
HMRC states that you would be able to claim back up to £1,187. We facilitate backdated claims on your behalf, meaning that you can claim up to last four tax years. If you apply directly to HMRC, you may find that you only receive the tax break going forwards.
How Do I Apply For A Marriage Tax Refund?
To get the process started, simply answer a few simple questions on our tax refund calculator
If I Get A Marriage Tax Refund, Does My Partner Have To Pay More Tax?
Claiming Marriage Allowance claim will usually transfer up to 10% of the Personal Allowance from the low earner to the higher-earner. This transfer generally comes at no cost to the lower-earner, as they earn enough to fully use up their Personal Allowance.
How Long Does It Take If My Claim Is A Success?
It can take up to two months for HMRC to process the changes to the recipient’s tax code.
Take advantage of the tax relief that’s available to you today
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