Couples Invited To Take Up Marriage Allowance

Couples who want to save tax by taking advantage of the new marriage allowance have started receiving invitations to sign up for the money saver.

HM Revenue & Customs (HMRC) has sent out emails to couples who registered an interest in the measure earlier in the year.

The message includes a personal link to the application page.

Anyone making the application has to confirm their identity with both their own and their spouse’s national insurance numbers.

The link is accessible for six times.

What is the marriage allowance?

The marriage allowance lets another basic rate taxpayer switch some of their income to a spouse paying tax at a lower rate.

In this tax year, the allowance saves a couple up to £212 a year by transferring £1,060 from the higher earning spouse to the lower earning spouse’s personal income tax allowance.

Couples can get the marriage allowance providing:

One partner’s income is between £10,601 and £42,385 for the 2015-16 tax year

Both spouses were born after April 6, 1935

Claiming the allowance stretches the higher earning spouse’s personal allowance by £1,060 to £11,060 while reducing the tax they pay by £212 a year.

The other partner’s allowance drops by the same amount to £9,540.

Income for the marriage allowance does not include tax-free payments, such as savings interest under £5,000 or the £5,000 dividend allowance, which starts in April 2016.

HMRC has an online calculator that shows how much income tax a couple can save with the marriage allowance.

Expats and the marriage allowance

Expats can qualify for the marriage allowance if the live in the European Economic Area (EEA); worked for the UK government during the tax year the claim is made or live outside the EEA in a country that has a double taxation agreement with the UK.

Check the tax treaties that are in force between the UK and other countries here to see if you qualify.

To apply for the marriage allowance, go to the online application form and follow the instructions.

HMRC will change tax codes within two months of a successful application for someone who is employed or on submission of a self-assessment tax return for the self-employed.

Shifting the relief remains in force until one partner cancels the arrangement or if the couple separate, divorce or one spouse dies.

If the relief is cancelled, the tax codes revert back to normal at the end of the tax year when the request is made.

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