What is the marriage allowance?

The Marriage Allowance lets a married couple or civil partners transfer £1,260 of one partner's unused personal allowance to the other. It can cut the couple's tax bill by up to £252 a year. To qualify, one partner must earn less than £12,570 and the other must be a basic rate taxpayer.

Everyone has a personal allowance of £12,570, the income they can earn tax free. If one partner earns less than that, part of their allowance goes unused. The Marriage Allowance lets them pass 10% of it, £1,260, to their spouse or civil partner. The receiving partner then pays 20% less tax on that amount, saving up to £252. Couples where both earn over £12,570 cannot benefit.

The receiving partner must pay tax at the basic rate, so they usually earn between £12,571 and £50,270. In Scotland they must pay the starter, basic or intermediate rate. Couples where one partner pays higher rate tax cannot use it. It does not apply to couples who live together without marrying or forming a civil partnership. It cannot be claimed if either partner pays higher rate tax.

You apply online through HMRC, and claims can be backdated up to four years. Many eligible couples never claim, so HMRC has run campaigns to raise awareness. Supporters say it recognises families where one partner stays at home or works part time. Critics say it rewards marriage rather than need and is too small to make much difference. The allowance is cancelled if a couple separates.

Who it affects: Married couples where one earns under £12,570