The Short Version
Marriage Allowance lets a married couple or civil partners move £1,260 of the lower earner's Personal Allowance to the higher earner. The higher earner's tax bill drops by up to £252 for the year.
That is the headline every bank and comparison site repeats. What they rarely say is that the £252 is the most the couple can gain, not what they will gain. The lower earner's own tax position decides how much of it survives, and for a surprising number of couples the real figure is close to zero.
This guide covers who can claim, how the numbers actually work, the point at which it stops being worth it, and the four year backdating window that closes for 2022/23 on 5 April 2027.
How Marriage Allowance Works
Everyone gets a Personal Allowance of £12,570 for 2026/27. It has been frozen at that level since 2021/22 and is due to stay there until April 2031. Income up to the allowance is tax free.
If one partner does not use all of their allowance, they can transfer a fixed 10% of it, £1,260, to the other. Two things then happen:
- The lower earner (the "transferor") has their Personal Allowance cut to £11,310.
- The higher earner (the "recipient") gets a tax reduction of 20% of £1,260, which is £252.
It is always the lower earner who applies, even though the higher earner gets the benefit. That trips people up. The partner with no income is the one who needs to fill in the form.
Once it is in place, the transfer rolls over each year automatically until one of you cancels it or you stop being eligible.
Who Can Claim
You can claim if all of these apply:
- You are married or in a civil partnership. Living together is not enough, however long you have been together.
- The lower earner's income is normally below £12,570.
- The higher earner pays tax at the basic rate, which for most of the UK means income between £12,570 and £50,270. In Scotland, they must pay at the starter, basic or intermediate rate.
- Neither of you was born before 6 April 1935. If one of you was, you should look at Married Couple's Allowance instead, which is usually worth more.
The recipient test is strict. If the higher earner pays any tax at the higher rate, including on dividends or savings, the couple cannot use Marriage Allowance for that year. A bonus or a one off dividend that pushes them over £50,270 can wipe out the claim for that year.
If you are not sure which band you sit in, our guide to net income explains how HMRC adds up the figure, and tax codes explained shows how it shows up on your payslip.
A Simple Example
Priya works part time and earns £7,000 a year. Her husband Tom is employed on £38,000.
Without Marriage Allowance, Tom pays income tax of £5,086, which is 20% of £25,430. Priya pays nothing because £7,000 is well inside her allowance.
With Marriage Allowance, Tom's bill falls to £4,834. Priya's allowance drops to £11,310, but her £7,000 is still comfortably under it, so she still pays nothing. The couple is £252 better off, every year, for one online form.
This is the case Marriage Allowance was designed for, and if it describes you, claim it today.
The Break-Even Point Nobody Mentions
The trouble starts when the lower earner is close to the £12,570 line.
Giving away £1,260 of allowance means the lower earner may start paying tax on income that used to be tax free. Every pound of non-savings income they have above £11,310 costs them 20p, which comes straight off the £252.
| Lower earner's income | Tax they now pay | Net gain for the couple |
|---|---|---|
| £9,000 | £0 | £252.00 |
| £11,310 | £0 | £252.00 |
| £11,800 | £98.00 | £154.00 |
| £12,200 | £178.00 | £74.00 |
| £12,570 | £252.00 | £0.00 |
The simple rule we give clients: if the lower earner's income from wages, self-employment, pensions or rent is under £11,310, the full £252 is yours. Between £11,310 and £12,570, the gain shrinks to nothing. Above £12,570, do not claim.
This matters more than it looks, because two of the most common situations sit right on that line.
Pensioners on the Full State Pension
The full new State Pension for 2026/27 is £241.30 a week, or £12,547.60 a year. That is £22.40 short of the Personal Allowance.
Take Margaret, who reached State Pension age in 2020 and has nothing else coming in. Her husband has a private pension and pays basic rate tax.
If Margaret transfers £1,260, her allowance drops to £11,310 and she becomes taxable on £1,237.60. Her bill is £247.52. Her husband saves £252. The couple gains £4.48 a year.
Worse, Margaret has no PAYE to collect the tax through, so HMRC will usually send her a Simple Assessment bill to pay. For £4.48, we would not bother.
Compare that with a pensioner on the old basic State Pension, which is £184.90 a week, or £9,614.80 a year. They are well under £11,310, so the full £252 lands. Plenty of couples where one partner reached pension age before April 2016 are missing this.
When the Lower Earner Has Savings Interest
Savings income is the exception to the break-even rule, and it works in the couple's favour.
On top of the Personal Allowance, there is a £5,000 starting rate for savings band taxed at 0%, available when your other income is low. A basic rate taxpayer also gets a £1,000 Personal Savings Allowance.
Ruth is retired and lives on £15,000 a year of interest from cash savings, with no pension. Her husband pays basic rate tax.
After transferring £1,260, Ruth's allowance is £11,310. The next £3,690 of her interest falls inside the £5,000 starting rate band and is taxed at 0%. She still pays nothing, and the couple gains the full £252.
Most online calculators only ask for a single income figure and would tell Ruth she does not qualify. She does. The GOV.UK guidance says income "normally" below £12,570 because that is the simple case, but the legal test is that the transferor is not a higher or additional rate taxpayer.
Company Directors and Dividends
This is the area where our view differs most from the standard advice.
Many owner-managed companies pay each director a salary of £12,570 and take the rest as dividends. Our guide to directors' remuneration explains why. If both spouses take that salary, neither can usefully transfer anything, because the lower earner is already at £12,570. Do not claim.
But where only one spouse is a director, something odd happens.
Daniel runs his own limited company. He takes a salary of £12,570 and dividends of £35,000. His wife Sophie has no income.
Daniel's dividends above the £500 dividend allowance are taxed at the ordinary dividend rate, which rose to 10.75% from 6 April 2026. His tax is £3,708.75.
With Marriage Allowance, he gets the standard reduction of £252, taking his bill to £3,456.75. Notice that the reduction is calculated at 20% even though his marginal rate on dividends is only 10.75%. If HMRC had simply added £1,260 to his allowance, it would have saved him £135.45. Because the legislation gives a fixed tax reduction instead, dividend-heavy recipients get nearly double the value. That is a small quirk in Daniel's favour.
The better answer
Here is the part we think matters most. Marriage Allowance is the floor for a couple like Daniel and Sophie, not the ceiling.
If Sophie owned ordinary shares in the company and received £13,070 of the £35,000 in dividends, her Personal Allowance and dividend allowance would cover all of it. Daniel's dividends would fall to £21,930 and his tax to £2,303.73.
| Approach | Couple's total income tax |
|---|---|
| No planning | £3,708.75 |
| Marriage Allowance only | £3,456.75 |
| Sophie holds shares and takes dividends | £2,303.73 |
Sharing the income saves £1,153.02 more than Marriage Allowance, every year. You cannot do both, because once Sophie uses her own allowance there is nothing left to transfer.
There are rules to respect. Shares need to be an outright gift of ordinary shares carrying full rights, not a share that only carries the right to income, otherwise the settlements legislation can tax the dividends back on Daniel. Gifts between spouses are generally protected by an exemption confirmed in the Arctic Systems case, but how the shares are set up matters. This is the conversation to have with an accountant before a share transfer, not after.
Backdating: The 5 April 2027 Deadline
You can backdate a Marriage Allowance claim for up to four previous tax years, as long as you were eligible in each of them. The Personal Allowance has been £12,570 since 2021/22, so the transfer has been £1,260 and the saving £252 in every open year.
| Tax year | Maximum saving | Claim by |
|---|---|---|
| 2022/23 | £252 | 5 April 2027 |
| 2023/24 | £252 | 5 April 2028 |
| 2024/25 | £252 | 5 April 2029 |
| 2025/26 | £252 | 5 April 2030 |
| 2026/27 (current) | £252 | Through your tax code |
A couple who has qualified all along and never claimed can get up to £1,008 back as a lump sum for the four earlier years, plus £252 through the current year's tax code. That is £1,260 in total.
The 2022/23 year drops out of the window on 5 April 2027. If you think you qualified back then, claim before that date or that £252 is gone for good.
Backdated claims are also possible if your partner has died since the year in question. GOV.UK has a separate route for that, and it is worth checking if you have lost a spouse in the last four years.
How to Apply
The lower earner applies, either online through GOV.UK or through their Self Assessment tax return if they file one. You need both National Insurance numbers and some ID for the person applying. The online service is free. You do not need to pay a claims company, and some of them charge a percentage of the refund for filling in a form that takes ten minutes.
Once approved, the changes show up in your tax codes:
- The recipient's code ends in M, for example 1383M, showing the extra £1,260.
- The transferor's code ends in N, for example 1131N, showing the reduced allowance.
If your codes do not change within a couple of months, check your personal tax account. Our guide to PAYE explains how employers apply the code.
If the recipient is self-employed or files a tax return for other reasons, the £252 is given in the Self Assessment calculation instead of a code.
When to Cancel
The transfer keeps running until someone stops it. Tell HMRC, or review your position, if any of these happen:
- The lower earner's income rises. A new job or a pension starting can push them past £11,310, and the claim may start costing more than it saves.
- The higher earner moves into the higher rate band. The couple is not eligible for that year.
- You separate, divorce or end a civil partnership.
- Your partner dies.
If the lower earner cancels for a reason other than divorce or death, the transfer usually runs to the end of the current tax year and stops from the next one.
Common Mistakes
- The higher earner applying. It has to be the lower earner.
- Claiming when both spouses take a £12,570 director's salary. Nothing is gained.
- Claiming on the full new State Pension. The net gain is £4.48 and comes with a tax bill for the pensioner.
- Ignoring savings income. A lower earner living on interest can often still claim in full.
- Forgetting about a bonus or dividend. One year in the higher rate band and that year's claim is lost.
- Paying a claims firm. The GOV.UK form is free.
- Treating it as the whole answer for a family company. Splitting income properly can be worth several times more.
How IAK Can Help
Marriage Allowance is one of the smaller reliefs, but getting it right is a quick win, and getting it wrong can mean a pointless tax bill for the partner with the lower income.
Our personal tax team checks whether a claim makes sense once every source of income is counted, handles backdated claims, and fixes tax codes that have gone wrong. For couples who run a business together, or where one runs a limited company, our tax planning service looks at salary, dividends and shareholdings in one go. You can test some of the numbers yourself with our dividend tax calculator and salary calculator, then get in touch if you want a second opinion.
Sources
- Marriage Allowance, GOV.UK, eligibility, the £1,260 transfer and backdating rules.
- Apply for Marriage Allowance online, GOV.UK, the free application service.
- Married Couple's Allowance, GOV.UK, for couples where one partner was born before 6 April 1935.
- Income Tax Act 2007, sections 55A to 55E, legislation.gov.uk, the statutory transferable allowance and the tax reduction for the recipient.
- Tax on savings interest, GOV.UK, the starting rate for savings and the Personal Savings Allowance.
- Tax on dividends, GOV.UK, dividend allowance and dividend tax rates for 2026/27.
- The new State Pension: what you'll get, GOV.UK, the full weekly rate.
- Income Tax (Trading and Other Income) Act 2005, section 626, legislation.gov.uk, the exemption for outright gifts between spouses under the settlements rules.
- Marriage allowance, Low Incomes Tax Reform Group, a detailed independent explanation of the rules.