Chapter 6 – Relief for married couples Flashcards
Relief for married couples
Married Couples Allowance – only available is one of the two spouses as born before 6 April 1935, civil partnerships can qualify. The MCA for 19/20 is £8,915, this is a tax reducer at 10%. For marriages before 5 December 2005, the reducer is given to the husband, after the date it is given to the partner with the highest income. For 19/20 the MCA amount is restricted if adjusted net income exceeds £29,600, the allowance is reduced by half of the excess income over £29,600. The minimum MCA is £3,450.
Marriage allowance – this is a transferable tax allowance. One partner can transfer 10% of their personal allowance to the other individual. When the election is made the relinquishing spouse PA will be reduced by 10% and the other partner receives a reduction in their income tax liability (£1,250 * 10% = 250).
To qualify you must be married for all or part of the tax year and at the time the election is made, the married couple’s allowance must not have been claimed and both individuals must pay tax at the basic rate. The election must be made within four years of the end of the tax year to which it applies.
