So there has been a lot of talk about the new marriage allowance – which is what the government are calling it – but should it really be called that? In the past allowances have most often been amounts of money that you can use to offset against your earnings to enable you to pay more tax.
There was a marriage allowance in the past which was called the ‘married couple’s allowance’ which was given to anyone who was married basically. Nowadays this old allowance is only valid for those people born before 1935 so the numbers are ever dwindling as to who is receiving it. This was a much more generous allowance too and did not depend on income.
The new ‘marriage allowance’ to my mind is a bit of a misnomer – it is not really an extra allowance but instead a transfer of one person’s existing allowance that they are not using, to the other partner in the relationship. In addition to that, you can only transfer it if your partner is not earning in the 40% tax bracket. So really the allowance is more of a transfer than an actual allowance.
At the moment it is also not too easy to claim the allowance as the only way you can do so is online and with the correct documents – which many people may not have. if you don’t have these then there should be a telephone helpline opening up later in the year and all payments will be backdated so that no-one will lose out.
To find out more about the new marriage allowance, including how to claim it, check out our previous article on the subject.