In sickness and in wealth: Marriage Allowance explained, image of a couple getting married | Crunch
Picture of crunch software on mobile

Professional Bio Templates & Examples

Create a compelling professional narrative for a proper, attention-grabbing introduction.
Website bios
Speaker intros
Professional Profile

In April 2015 the Conservative Government introduced the Marriage Allowance policy. The policy allows some couples to share their personal tax allowance and potentially save on the amount of Income Tax they pay.

What is Marriage Allowance?

Marriage Allowance is a method of sharing a Personal Allowance - the amount you are able to earn before paying any Income Tax - to decrease the amount of Income Tax one person in a couple pays.

If you’re in a couple, one of you pays basic level Income Tax and the other is exempt from paying Income Tax because they earn less than the Personal Allowance.

The person who is exempt from paying Income Tax can share some of their personal allowance with their partner.

Who is eligible for Marriage Allowance?

To be eligible for Marriage Allowance you have to be married or in a civil partnership. One of you has to be earning the Personal Allowance threshold or less (making them exempt from paying Income Tax) and the other has to be taxed at the basic rate. You can find the current tax rates here.

How does Marriage Allowance work?

Under the Marriage Allowance policy, the person who earns the personal allowance threshold or below is able to transfer up to £1,250 of their Personal Allowance to the person paying the basic rate of tax.

This is done by registering with HMRC, who will change your tax code. From then on the amount of Marriage Allowance you are eligible for will transfer to your partner every year unless you cancel the arrangement.

With a sole breadwinner

Here’s how Marriage Allowance works out in the case of a couple with only one earner for the tax year 2020/21.

Sarah Jimmy
Without Marriage Allowance
  • Salary: £32,500
  • Personal Allowance used: £12,500
  • Taxable income: £20,000
  • Income Tax paid: £4,000*
  • Salary: £0
  • Personal Allowance available: £12,500
  • Income Tax paid: £0
With Marriage Allowance
  • Salary: £32,500
  • Personal Allowance used: £13,750
  • Taxable income: £18,750
  • Income Tax paid: £3,750
  • Salary: £0
  • Personal Allowance available: £11,250
  • Income Tax paid: £0
Tax saving with Marriage Allowance: £250

*Assuming they’re not a Scottish resident – Scotland has different tax rates

With both partners earning

And here's how it breaks down when both partners are earning.

Sarah Jimmy
Without Marriage Allowance
  • Salary: £20,000
  • Personal Allowance used: £12,500
  • Taxable income: £7,500
  • Income Tax paid: £1,500
  • Salary: £10,000
  • Personal Allowance used: £10,000
  • Personal Allowance remaining: £2,500
  • Income Tax paid: £0
With Marriage Allowance
  • Salary: £20,000
  • Personal Allowance used: £13,750
  • Taxable income: £6,250
  • Income Tax paid: £1,250
  • Salary: £10,000
  • Personal Allowance used: £10,000
  • Taxable income: £0
  • Income Tax paid: £0
Tax saving with Marriage Allowance: £250

How much does Marriage Allowance save?

Marriage Allowance can save up to £250 in the initial year. This calculation is based on being able to transfer the maximum amount of personal allowance (£1,250).

The amount individual couples will save in tax will vary based on how much of their Personal Allowance they use, and their earning levels.

How do I claim Marriage Allowance?

You need to register your interest with HMRC who will send you the information in the post.

guide cover for "8 great ways accountancy can help your ecommerce business"

Unlock your free ecommerce business guide!

Expert Insights
Actionable Tips
Strategic Advice

To receive our guide on valuable insights into the world of expenses for limited companies please submit your details below.

Please enjoy our guide on 8 Ways Great Accountancy Helps ecommerce Businesses Succeed.

Click below to download our PDF guide.
Oops! Something went wrong while submitting the form.

By submitting you are agreeing to be contacted by Crunch.

Speak to an accounting expert

If you're unsure what level of support you need, our friendly team are on hand to help you pick the right package for you.
Self Assessment tax returns done for you, from just £200 £130+VAT
Take the stress out of Sole Trader Accounting, for just 1%+VAT of your money earned. No monthly subscriptions! With CrunchONE
Get 25% Off Crunch Pro and Premium for the first 3 months!
Share this post
Tom West
Community and Social Manager
Updated on
March 9, 2020

Knowledge Hubs

Take control of your accounts, today

Crunch’s effective software package includes being able to talk to an expert client manager and a Chartered Certified Accountant. You can count on Crunch to make you productive and profitable.
Picture of crunch software on mobile

Professional Bio Templates & Examples

Create a compelling professional narrative for a proper, attention-grabbing introduction.
Website bios
Speaker intros
Professional Profile

Unlock Your Free Limited Company Expense Guide!

Expert Insights
Actionable Tips
Strategic Advice

Save your seat! Live e-commerce webinar

Register and soak in the wisdom from top industry leader! June 27, 2024 1:30 PM
Dive into e-commerce basics
Expert industry insights
Practical tips and savvy tricks
Pro Tip
Looking for a dedicated accountant?

Our Enterprise packages offer tailored support for you and your business. You can focus on your business, we'll crunch the numbers.

Pro Tip
Boost your business finances with our Ltd Company packages!

Award-winning software with support from expert accountants

Pro Tip
Take the stress out of Sole Trader Accounting

Just 1%+VAT of your money earned. No monthly subscriptions! With CrunchONE

Pro Tip
Get 50% off your Self Assessment

Get your tax return sorted by experts for only £130+VAT!

Pro Tip
Using cloud-based accountancy software to manage your finances gives any small business a big advantage!

At Crunch we provide affordable cutting-edge, easy-to-use software with real human support from expert chartered accountants. That’s probably why 81% of our clients would recommend Crunch.

Pro Tip
Did you know - you have access to a Chartered Certified accountant for free on our paid subscriptions?

Book a call with our one accountants and get your questions answered. Just £25.50 +VAT for Crunch Free users.

Pro Tip
Get 35% off your Tax Return!

Crunch’s Self Assessment service provides an expert accountant to complete, check, and file your Self Assessment for you for just £130 +VAT.

Pro Tip
Did you know - We have a free plan that is great for sole traders and limited companies?

Why not see for yourself? It’s simple and easy to use and 100% free.