How does the marriage allowance transfer work and who benefits?

Full answer

The marriage allowance is a government scheme that allows one partner in a marriage or civil partnership to transfer a portion of their unused Personal Allowance to the other, reducing the couple's combined income tax bill. How it works The lower-earning partner can transfer GBP 1,260 of their Personal Allowance (10% of the standard GBP 12,570 allowance) to the higher-earning partner. The higher earner receives this as a 20% tax reduction on GBP 1,260 -- a saving of GBP 252 per year. Eligibility conditions -- The lower earner must have income below GBP 12,570 (so they are not using all their Personal Allowance) -- The higher earner must be a basic-rate taxpayer -- income between GBP 12,571 and GBP 50,270 in 2026/27 -- If the higher earner pays tax at the higher (40%) or additional (45%) rate, the marriage allowance cannot be claimed -- Both must be UK taxpayers (or the non-UK partner must be entitled to the UK personal allowance, e.g., due to an EEA nationality provision that is now limited) Effect on each partner -- Lower earner: their Personal Allowance reduces from GBP 12,570 to GBP 11,310. If their income is below GBP 11,310 this makes no practical difference. If their income is between GBP 11,310 and GBP 12,570, they will pay 20% tax on the amount above GBP 11,310 -- Higher earner: receives a GBP 252 annual reduction in their income tax bill (HMRC adjusts the tax code to 1,383M to reflect the transfer) Backdating Applications can be backdated to the previous 4 tax years. In 2026/27 you can claim for 2022/23, 2023/24, 2024/25, 2025/26 and 2026/27 -- a total potential refund of up to GBP 252 x 5 = GBP 1,260 (subject to the lower earner having been below the PA in each year). How to apply The lower earner applies online at GOV.UK using their Government Gateway account. The application takes a few minutes. Once approved, HMRC adjusts both partners' tax codes and issues any backdated refund to the higher earner. What if circumstances change? If the higher earner's income rises into the higher-rate band during the year, HMRC will cancel the marriage allowance from the start of the tax year and may reclaim the benefit. If the couple separates or divorces, the transfer ends. If one partner dies, the transfer continues for the remainder of that tax year. Both partners below the Personal Allowance If both partners have income below GBP 12,570, neither pays income tax and there is no tax to reduce. The marriage allowance cannot create a refund where no tax has been paid.

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