The marriage allowance was introduced in 2015, to reward marriage via the tax system. It is actually 10% of the taxpayer’s personal allowance which is transferred from the spouse who isn’t using it to their partner who is taxed at no more than the basic rate. It is only available to couples who are married or in a civil partnership.
The allowance is worth a maximum of £230 for 2017/18 (£1,150 x 20%), but it has to be specially claimed, and many people have been put off by the online application process. In fact taxpayers can claim the allowance by calling HMRC on 0300 200 3300, or make the claim in writing. Once the claim has been accepted it remains in place for future tax years while the marriage continues, unless the claim is revoked.
Once the marriage has ended through divorce or death, the allowance can’t be claimed, even for the earlier years when the couple were together. To solve this problem the law will be changed on 29 November 2017 to allow claims for the marriage allowance to be made on behalf of a deceased person, but not where the couple have divorced.
As any claim for the marriage allowance can back-dated up to four years, this change will allow widows or widowers to resubmit a claim where it has been refused in the past for years back to 2015/16. It will be possible to transfer the allowance to benefit the surviving spouse, and equally to transfer the marriage allowance to the deceased person to use against their income in their last years.