Marriage Allowance

Registration opens for new Marriage Allowance

HMRC have recently announced that married couples can now register their interest in applying for the new Marriage Allowance  (see www.gov.uk/government/news/registration-opens-for-new-married-couples-tax-break).

In order to be eligible to elect to claim the allowance for 2015/16, an individual should:

• be married or in a civil partnership
• have annual income of less than £10,600
• have a partner who receives annual income of between £10,601 and £41,385
• be born after 6 April 1935, as should their partner.

Our concern is that many couples are not going to know from the outset whether they will definitely qualify for this relief. As the allowance can be claimed for up to four years after the end of the tax year concerned, should there be any doubt about entitlement, our advice is to wait until the end of the tax year before making the claim.

Furthermore, should the higher earner be self employed, then no advantage will be gained from making the election now. For anyone in self assessment, it should be fairly straight forward to claim any relief due via the appropriate tax return – assuming the lower earning spouse has previously made the election.

The married couples who could benefit from taking action now would be those who do not need to complete a tax return, but who have predictable levels of income and meet the qualifying criteria mentioned above. The higher earner should also be paying some tax via PAYE.

We will be happy to provide clarification should anyone wish to better understand how this relief is intended to work.