If you are married (or a civil partner) and either you or your spouse (I
include civil partners in that term) was born before 6 April 1935 then please
read on. And if you know anyone in that position please print this out and pass
it on to them. Because there is growing evidence that people in this group may
be paying too much tax.
One partner in these older couples is entitled to a deduction off their
tax called Married Couple’s Allowance. It is £6,965 a year but is worth only 10%
of that so those who qualify normally get £696.50 as a straight deduction off
their tax for the year.
The allowance is normally given by an adjustment to the entitled person’s
tax code. But for some reason the Revenue computer is giving a lot of people
half the amount it should. That has happened to many people who have been given
the correct allowance for years. It is a simple mistake – though its cause
remains a mystery – and a call to the Revenue will normally put it right.
Needless to say there are some complexities to this allowance. It is
given to the husband if the couple qualified before 5 December 2005. But his
wife can choose to have up to £133.50 of it off her own tax bill for the year.
And with her husband’s agreement she can choose to have £267. He will get less
of course.
For couples who first qualified on 5 December 2005 or later the allowance
should automatically be given to the partner with the higher income. But the
other partner can make the same choices about having a share of it.
Those choices need to be made before the start of the tax year so it is
too late for 2010/11 but choose now and you will get it off your next year’s
tax.
Any partner who is entitled to the allowance but has insufficient income
to make use of it can choose to give the unused part of it – right up to the
full amount – to their spouse or partner. They can choose to do that at any time
and can look back to 2004/05 to get their tax reduced.
You can get the allowance even if you have married recently as long as at
least one of you was born before 6 April 1935. In the year you marry you will
get a reduced amount.
One final warning. The allowance can be reduced if the entitled spouse or
partner has an income above £29,230. But it is never reduced below £2,670 which
is worth £267 off the tax bill.
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