Marriage Tax Allowance – Are You Eligible for It?
Did you know that if you are married or you are in a civil partnership, there’s a possibility that you’re entitled to the marriage tax refund or allowance? In fact, you can get as much as £1,220 if you backdate for about four years or so.
This is too good to miss, and, surprisingly, many couples are missing out on this tax perk.
In this post, we are going to answer some of your questions about the marriage tax allowance:
What Is Marriage Tax Allowance?
Marriage tax allowance is a perk that allows couples to transfer 10% of their tax-free allowance to their spouse or civil partner.
Couples who have been married for more than two years will be able to apply for the allowance from this April if they haven’t already applied for the transfer.
According to the HMRC, around 1.3 million married couples will be entitled to claim this tax perk.
This is a new perk that was introduced in April 2015. Previously, only couples with a stay-at-home spouse were allowed to do this.
How Does It Work?
The marriage tax allowance allows you to transfer 10% of your personal allowance to your spouse.
If you are married or in a civil partnership, your allowance is £11,850 in 2017/18. Therefore, your spouse can transfer £1,190 of allowance to you.
If you have more than one spouse, you can transfer the same 10% of your allowance to each of them.
Who Is Entitled to This Tax Perk?
To qualify for the marriage tax allowance, you must:
- Be married or in a civil partnership
- Claim married person’s allowance
- Have an income of less than £43,000
- Not be in a later year of the marriage tax allowance transfer
- Have a non-working spouse or civil partner
- Not be a higher-rate taxpayer
How Can You Apply for It?
If you meet the above criteria, you can apply for the marriage tax allowance. You need to fill out the HMRC form R85 and send it to your tax office.
If you have not received the form, you can call the HMRC on 0300 200 3300 or download the form.
How Can You Backdate Marriage Tax Allowance?
You can backdate the marriage tax allowance for a maximum of four years.
Couples who have missed the deadline to apply for marriage tax allowance can apply for the backdated allowance.
The process is quite simple. You need to apply for the backdated allowance and send Form R85 to your tax office.
You have to include a letter explaining why you have delayed the application. You must also include all the relevant information about your marriage or civil partnership.
When Should You Cancel Marriage Allowance?
If your income exceeds £43,000, you cannot continue claiming the marriage tax allowance. You will need to cancel your allowance and file a self-assessment return by 5 October, or the HMRC may fine you.
Whether you are canceling marriage tax allowance or marriage allowance, you need to fill out the HMRC form R85 and send it to your tax office. You do not need to pay the money back.
Conclusion
The marriage tax refund or allowance is a great tax benefit that drastically reduces your tax bill.
If you are eligible, you should definitely consider applying for it. This will enable you to save hundreds of pounds on your tax bill.
To know how much you could get for a refund, make use of the Tax Refund Calculator’s marriage tax allowance calculator. It’s the easiest way for you to know how much you can claim. Try it today!