HMRC have announced that registration for the new 'Marriage Allowance' for married couples and those in civil partnerships is now open.
From 6 April 2015 certain married couples and civil partners may be eligible for a new Transferable Tax Allowance referred to by the Government as the 'Marriage Allowance'. The allowance will enable eligible spouses and civil partners to transfer a fixed amount of their personal allowance to their spouse. The option to transfer is not available to unmarried couples.
The option to transfer will be available to couples where neither pays tax at the higher or additional rate. If eligible, one partner will be able to transfer 10% of their personal allowance to the other partner which means £1,060 for the 2015/16 tax year which could save them tax of up to £212 a year.
Couples can register their interest to receive the Allowance.
The government estimates that more than four million married couples and 15,000 civil partnerships will be eligible for the tax break.
Chancellor of the Exchequer George Osborne said:
'We made a promise to introduce a recognition of marriage into our tax system - and now we're delivering on that promise.
This includes updating the tax system so that it recognises marriage and civil partnerships.
Our new Marriage Allowance means saving £212 on your tax bill couldn't be simpler or more straightforward.'
From April, HMRC will contact those who have already registered for the 'Marriage Allowance' to apply. People can register at any point in the tax year and still receive the full benefit of the allowance. It is also possible to claim the allowance after the end of the tax year where claimants are unsure if they will qualify.
Applying online is simple. One person in a couple will apply online to transfer the allowance to their spouse or civil partner, and HMRC will tell the recipient about the change to their Pay As You Earn (PAYE) tax code.
Internet link: GOV.UK