Marriage Allowance for Self-Assessment Tax Returns
Marriage Allowance for Self-Assessment Tax Returns
As the deadline for self-assessment tax returns edges closer, the complicated process for anyone who claims marriage allowance to follow, related to timings, is proving difficult for many.
Here at Kennedys Accounting, we are experienced in complex self-assessments and are happy to assist with your return, the following information however gives a brief overview!
Firstly, the order in which self-assessments are submitted may need to be considered, therefore it is important to note that the person transferring the allowance (transferor) should submit their tax return first if the person receiving the allowance (recipient) is also in self-assessment.
It is important then to note that the recipient of the marriage allowance should leave 72 hours after the transferor has submitted their tax return before submitting their own tax return, therefore you can’t leave this until the end of the January as you may miss the deadlines due to the timings.
So how does the marriage allowance work?
Marriage allowance lets taxpayers transfer £1,260 of their personal allowance to their husband, wife or civil partner. This reduces their tax by up to £252 in the tax year (6 April to 5 April the next year).
To benefit as a couple, the lower earner must normally have an income below the personal allowance, which is currently £12,570. The higher earner has to earn less than £50,270. People on the state pension also qualify for marriage allowance although not in addition to married couple’s allowance which is for people born before 6 April 1935.
As the UK tax system diverges from the Scottish system, it is important to note that for taxpayers in Scotland, the partner must pay the starter, basic or intermediate rate, which usually means their income is between £12,571 and £43,662 under 2024/25 Scottish tax rates.
If this is ‘news to you’, don’t worry you may be able to go back to some previous tax returns as claims for all UK taxpayers can be backdated to include any tax year since 5 April 2020 when they were eligible for marriage allowance. The partner’s tax bill will be reduced depending on the personal allowance rate for the backdated years.
If this is something that you would like help with – please get in touch, we appreciate that tax is complex and we would be pleased to assist.