Married Couple’s Allowance: Tax Relief for Older UK Couples

The Married Couple’s Allowance is a significant tax benefit available for couples in the UK where at least one partner was born before April 6, 1935. This article outlines the key features of this allowance and will be useful to those who are studying for any of the CII CF1, R01, R03, R06, AF1, or AF5 exams.

This article is correct as at 10 October 2024 and is relevant to examinable tax year 2024/25.

Here’s a reminder of the features of the Married Couple’s Allowance:

• The allowance is available to married couples and to couples in a civil partnership where one spouse was born before April 6, 1935.
• Tax relief is given at 10%.
• Maximum Married Couple’s Allowance is £11,080 for 2024/25.
• Basic Allowance is £4,280.
• So, for the 2024/25 tax year, it could cut tax bills by between £427 and £1,108 a year.
• The portion of the Married Couple’s Allowance in excess of a basic allowance of £4,280 is reduced by £1 for every £2 of adjusted net income over £37,000.
• For those married before 5 December 2005, the married couple’s allowance is allocated to the husband, although it can be transferred to the wife.
• For couples married on or after 5 December 2005, and for same-sex partnerships registered under the Civil Partnership Act 2004, the tax allowance for any given year is allocated to the partner with the higher income.
• Married Couple’s Allowance can be claimed via self assessment or by contacting HMRC.

Let’s look at an example

Marion and Ken were married in 1965. They are both aged 92. Ken’s total taxable income is £42,000.

As they were married before 2005, the Married Couple’s Allowance belongs to Ken.

He has earnings of £5,000 above £37,000 so his allowance is reduced by £2,500. He will receive £858 (£11,080 – £2,500 = £8,580 @ 10%) off his tax bill.

For couples who are not old enough to qualify for the Married Couple’s Allowance, they may be eligible for the Marriage Allowance. Additionally, marriage provides other financial benefits beyond these two allowances, such as tax advantages like the spousal exemption for transferring assets and inheritance rights.

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