If you are married or in a civil partnership and your partner earns more than you, Marriage Allowance lets you transfer £1100 of your personal allowance to them, reducing their tax by up to £220. However, as the lower earner, you can only have an income of £11,000 or less.
To apply for Marriage Allowance, you can go online to the gov.uk website. There are some requirements if you do apply, which are:
- You must be married or in a civil partnership,
- As the lower earner, your income must be under £11,000,
- Your partner’s income must be between £11,001 and £43,000.
If you or your partner are living abroad, you can still apply for Marriage Allowance, as long as you get a Personal Allowance. You can also still apply if you or your partner are receiving a pension.
If you apply online and are successful, there will be some changes made to your Personal Allowance, which will be backdated to the start of the tax year. HMRC will then give your partner their extra allowance by either changing their tax code or if they’re self-employed, when they send in their Self-Assessment tax return.
The Personal Allowance will be automatically transferred every year until it is either cancelled, which can be done online, or if your marital circumstances change.