16 Jul What is marriage allowance and can we claim it?
We all know that tying the knot can affect your day-to-day money management, but exactly what effect does marriage or a civil partnership have on your financial status? Here we’re looking at marriage allowance.
There was a time that making the leap from single life to married bliss came with a great range of tax incentives. Married couples used to be viewed by the Government as one single taxable entity and so you would be taxed less after getting married.
The picture is different today: even when joined to another in matrimony, we are now mostly taxed individually, meaning the tax benefits are few and far between.
How will your tax status be affected?
You should inform HM Revenue & Customs of your new marital status to make sure you are taxed correctly. You can do this by following the GOV.UK link here.
Marriage allowance allows you to transfer £1,190 of your personal allowance to your husband, wife or civil partner if they earn more than you do saving tax of up to £238 in the year.
It is estimated that one in four couples who are eligible for marriage allowance fail to claim it.
The lower earner must have income of £11,850 or less to be able to make the claim.
Claims can be backdated for any tax year since 5th April 2015 providing you were eligible in those tax years.
Your application can be completed online and once an application is complete it is processed immediately. The new form is expected to take you only ten minutes to complete.
Do you need to update your will?
As soon as you get married, your existing will becomes automatically invalid. You will need to look into setting up a new will, which could name your spouse as your primary beneficiary.
It may also be a good idea to look into getting life insurance now if you are not already covered, particularly if you have a financial commitment that one spouse would not be able to meet on their own, like a mortgage. Contact us if you have any queries about this blog article, or need a hand to make these important changes. We are here to help you with your accountancy and financial advice needs now and in the future.