(UK) Marriage Allowance: the UK Transfer Most Eligible Couples Miss

The UK abolished the married couple's allowance for most people decades ago and replaced it, eventually, with a narrower transferable allowance. It applies to married couples and civil partners where one partner earns below the personal allowance and the other pays basic rate tax.

How it works

The lower earning partner transfers 10% of the personal allowance, currently 1,257 pounds of the 12,570 allowance, to the higher earning partner.
The recipient's tax bill falls by 20% of that amount, currently 251 pounds a year.
The transferor's allowance is reduced correspondingly, which costs nothing if their income was below the reduced allowance.
It continues automatically once claimed, until circumstances change or it is cancelled.
First claims can be backdated four years, which makes an initial claim worth around a thousand pounds.

Who qualifies

Condition	Requirement	Common failure
Relationship	Married or in a civil partnership	Cohabiting couples do not qualify, however long established
Lower earner's income	Below the personal allowance	Income slightly above it disqualifies, though a partial benefit may still arise
Higher earner's tax rate	Basic rate, not higher or additional rate	A promotion into the higher rate ends eligibility
Scottish taxpayers	Starter, basic or intermediate rate	The Scottish band structure changes the test
Both born after 6 April 1935	Otherwise the married couple's allowance may apply instead	The older allowance is more generous where available

The typical qualifying household is one where one partner works part-time, is a full-time carer, is studying, or is out of work. Those are precisely the households least likely to be reading about tax reliefs, which is a large part of why take-up has remained stubbornly incomplete.

How to claim

The claim is made by the lower earning partner through the government website, and requires both partners' National Insurance numbers and a form of identity verification. It takes a few minutes.

The lower earner applies, not the higher earner. Applications made the wrong way round are rejected.
Ask for backdating explicitly. The online form offers it, and the earliest available year expires each April.
The recipient's tax code changes, usually to one ending in M, and the transferor's to one ending in N.
If the recipient files a self assessment return, the transfer is reflected in the calculation rather than in the code.

Commercial services offering to make the claim for a percentage of the refund exist and are unnecessary. The claim is free and the form is short.

When to cancel it

If the transferor's income rises above the reduced personal allowance, or the recipient moves into the higher rate band, the transfer can leave the couple worse off overall. HMRC will generally adjust, but the responsibility to notify a change sits with the taxpayer.

A cancellation by the transferor takes effect from the start of the following tax year. A cancellation by the recipient, or following bereavement or divorce, is backdated to the start of the tax year, which can produce an underpayment.

The other unclaimed reliefs

Marriage allowance is one of several small UK reliefs that go unclaimed at scale. The others worth checking are higher rate pension relief on personal contributions, work expense claims for professional subscriptions and uniform cleaning, and the tax relief available on charitable gifts for higher rate taxpayers.

Individually they are minor. Claimed together with four years of backdating, they frequently come to a four figure sum. The wider point about unclaimed money is in which countries refund automatically.

The allowance reduces tax rather than income, so it is worth the same at any qualifying salary. Check your position on the UK Salary Calculator.