The Difference between Marriage Allowance and Married Couple’s Allowance
3rd July 2019Elizabeth Hughes0 Comments.4 minutesTax
Though the names are similar enough to make things nice and confusing, the Marriage Allowance and Married Couple’s Allowance have slightly different requirements. Don’t worry, we’ll take you through the basics.
What is Marriage Allowance?
Marriage Allowance is a type of tax relief. It means that a UK tax payer in 2019/20 can transfer £1,250 of their Personal Allowance over to their partner. The Personal Allowance is the amount of money someone is allowed to earn before they have to start paying tax on it.
For the 2019/20 tax year, the Personal Allowance is £12,500. The Personal Allowance is deducted from your total taxable income at the end of the year. The Marriage Allowance is credited as a reduction on your tax bill.
For those taking advantage, the recipient’s tax code will normally change to M and the sender’s tax code will usually change to N.
Marriage Tax Allowance claims can be backdated by up to 4 years but be aware that you must be eligible for all of those years. Earnings should also fall within the specific tax thresholds of any past years.
You are eligible for Marriage Tax Allowance if you are:
Married or in a civil partnership
Not already receiving Married Couple’s Allowance (which we’ll get to!)
Born after April 6th 1935
If one of you is earning less than the Personal Allowance and therefore not eligible to tax (i.e. earning less than £12,500)
What is Married Couple’s Allowance?
The Married Couple’s Allowance is a more generous version of the Marriage Allowance. Couples who are married or in a civil partnership are only eligible if one of you was born before 6th April 1935.
For couples married before December 5th 2005, the amount of allowance that can be transferred is calculated using the husband’s salary. The allowance can still be transferred over to the wife.
For civil partnerships and marriages taking place after December 5th 2005, the allowance will be calculated using the salary of the highest earner in the couple.
The difference between them
Both types of allowance are a tax relief for married or civil partnered couples, but with different rules for eligibility, and the actual allowance brackets being different.
The main difference between the two types of allowance really comes down to date of birth and the date you were married or formed a civil partnership.
The Married Couple’s Allowance gives a more generous allowance, but is only available if at least one person in the couple was born on or before April 6th 1935. The Marriage Allowance where both people were born after that date.
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