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New married couples tax break opens for registration

Marriage tax allowance

Registration has opened for the new marriage tax allowance –which will allow some couples to share part of their annual income tax allowance. Go to gov.uk/marriage-allowance and give some details to register your interest. HM Revenue & Customs will be in touch to tell you when you can make a formal claim.

How does the allowance work?

Couples made up of one non-taxpayer and one basic-rate taxpayer will be able to share some of the non-taxpayer’s unused annual income tax allowance.

Each year, individuals can earn up to a set amount each year without having an income tax liability. The personal allowance from April 2015 will be £10,600.

Anyone who earns less than that amount –from work, savings and pensions– does not pay any income tax. Under the new scheme, they will be able to transfer up to £1,060 of their unused allowance to their spouse or civil partner –as long as he or she is a basic-rate taxpayer earning between £10,601 and £42,385 a year.

Who qualifies?

Anyone who is married or in a civil partnership and they meet the rules on earnings. Also, both members of the couple have to have been born on or after 6 April 1935 – if one member was born before then, they can claim the married couple’s allowance instead.

How much will it save us?

Up to £212 a year in the first year.

From April 2015, anything you earn between £10,601 and £42,385 a year will be taxed at 20%. If your spouse or partner earns £7,500 a year, they effectively have £2,500 of their allowance that they are not using. Of this, they can transfer the full £1,060. This increases your tax-free allowance to £11,660, and the 20% saving on that extra bit is equal to £212.

If your partner’s earnings are much closer to £10,600, they can still share the leftover amount of their allowance. Say they earn £10,000; they can give you the remaining £600. In this case you will save £120 a year.

From April 2015, HMRC will tell you about the change to the Pay As You Earn (PAYE) tax code or how to reflect the changes in your Self Assessment calculations.