There are many tax tricks you can use when you are legally married and some of these include exemptions for Inheritance Tax and Capital Gains Tax for example, but a far more common one to use is the Marriage Allowance.

Basically, if spouse 1 is a low earner (with total income less than £12,570), spouse 1 can transfer up to 10% of their personal allowance (£1,260) to their spouse 2.  Basically, this means the higher earning spouse 2 can extend the amount they earn “tax-free” by up to £1,260 meaning a total of £13,830 is tax-free, rather than the standard £12,570!

This reduces spouse 2’s tax bill by up to £252 in that tax year – winner!

Here are the rules in detail:

https://www.gov.uk/marriage-allowance

Rules you need to be aware of!

• You must be legally married or in a civil partnership
• The higher earning spouse must not be a higher rate taxpayer (ie:  have income above £50,270).  In Scotland the earnings limit is £43,662!
• If you or your partner were born before 06/04/1935, something called “married couple’s allowance” may be a better alternative.
• You are allowed to backdate any claim to 05/04/2018.
• Once claimed, it will transfer every year until and unless you tell HMRC otherwise.

Other sources of help:

https://www.moneyhelper.org.uk/en/work/employment/marriage-and-married-couples-allowance

https://www.moneysavingexpert.com/family/marriage-tax-allowance/

https://www.equifax.co.uk/resources/money-management/marriage-tax-allowance.html

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