Income tax allowances for married couples

The system of independent taxation

Since the introduction of independent taxation in 1990, all individuals have been assessed for tax as separate persons.  This reform reversed a principle that had underpinned the tax system for almost two hundred years: that a married woman’s income was simply part of her husband’s income, and should be taxed as such.

The introduction of the married couple’s allowance

As part of this reform a new tax allowance, the married couple’s allowance (MCA), was introduced. The MCA could be claimed by all married couples. In April 2000 the MCA was withdrawn from all couples, except those who had already reached the age of 65 or over. This remains the case. As a consequence only those couples in which one partner is at least 89 years old will be entitled to claim the MCA in the coming tax year (2023/24).

The introduction of the transferable marriage allowance

In September 2013 the then Prime Minister, David Cameron, announced the introduction of a new transferable tax allowance for married couples and civil partners. From April 2015 spouses and partners would be allowed to transfer £1,000 of their own personal tax allowance to their partner, provided neither of them were higher rate taxpayers. In the March 2015 Budget it was confirmed that the personal allowance would be £10,500 for 2015/16, so that the ‘marriage allowance’, as it is sometimes called, would be set at £1,050. The allowance would be set at 10% of the personal allowance in future years.

Initially eligible couples had to register online for the ‘marriage allowance’ but may now apply by writing to HMRC or by phone, using HMRC’s helpline for income tax queries on 0300 200 3300. Couples who register after the beginning of the tax year are still be entitled to the full annual allowance. The general time limit for making a claim for repayment of overpaid tax is four years, so that since 6 April 2023 claims for the past tax years 2015/16 to 2018/19 have been out of time.

In the Autumn 2017 Budget the Government announced that provision would be made to allow claims in cases where a partner has died before the claim was made. Claims may be backdated by up to 4 years.

The married couple’s allowance and the marriage allowance for 2023/24

In the Autumn Statement 2022 the Chancellor Jeremy Hunt announced that the married couple’s allowance would be £10,375 for 2023/24, increased in line with inflation from 2022/23. Tax relief for the allowance is ‘restricted’ to 10%.  In effect taxpayers receive a credit worth 10% of the MCA to set against their final tax bill: ie, £1,038.

The Chancellor also confirmed that the personal allowance would be fixed, at £12,570 for 2023/24, and the ‘marriage allowance’ would also be fixed, at £1,260 for 2023/24. As recipients use the transferred allowance to offset against their liability to basic rate tax, which is charged at 20%, the allowance may be worth up to £252.

Further reading

This briefing gives a short history of the withdrawal of the married couple’s allowance, and the introduction of the marriage allowance. Commons Library briefing Tax, marriage & transferable allowances discusses the development of the new marriage allowance, in the context of wider debates about the way in which the tax system treats married persons.