New research has shown that some 3.2 million married couples have failed to claim their Marriage Tax Allowance, which can save them up to £220 this tax year.
The allowance, which was introduced in April 2015 to “recognise marriage in the tax system”, enables an individual to transfer £1,100 of their personal allowance to their spouse.
All is not lost though as couples who were eligible for the allowance in the tax year ended 5 April 2015 can backdate their claim, resulting in a saving of up to £432.
An individual is entitled to claim the Marriage Tax Allowance if the following conditions apply:
- the individual is married to, or in civil partnership with, the other party;
- the individual must earn £11,000 or less per annum;
- the other party is a basic rate taxpayer; and
- both parties were born on or after 6 April 1935.
It is believed that many married couples are unaware of the tax break, hence its low take-up.
Ignorance is not bliss when it comes to managing your personal finances and whilst the saving may seem negligible, if utilised as part of an overall wealth planning strategy, those small steps could make a difference.
Less than a quarter of couples eligible for marriage tax allowance are bothering to claim it, according to HM Revenue and Customs (HMRC)