Millions of married couples are yet to claim the Government’s Transferable Tax Allowance, latest figures from HMRC show.
Of the 4.2 million couples eligible for the tax allowance, just one million have actually claimed the relief, which could be worth a few hundred pounds.
Introduced in April 2015, the Transferable Tax Allowance allows eligible married couples and civil partners to transfer 10% of their personal allowance to their spouse (£1,100 for the 2016/17 tax year).
This means that for those couples where one person does not use all of their personal allowance the benefit will be worth up to £220 in 2016/17.
However, is also possible to backdate a claim for the previous tax year. With the allowance worth £212 in 2015/16, it may now be possible to claim up to a combined total of £432 for both tax years.
The option to transfer is only available to couples where neither pays tax at the higher or additional rate. The lower earner must also have an income of £11,000 or less.
Eligible couples can apply for the marriage allowance online at www.gov.uk/apply-marriage-allowance. The spouse or partner with the lower income applies to transfer some of their personal allowance by entering some basic details.
Where either spouse was born before 6 April 1935, then a married couple’s allowance is available instead.
We can advise on a range of personal tax issues – please speak to us for further information.