Martin Lewis shares how married couples can claim free £1,200

The Independent

Martin Lewis shares how married couples can claim an extra £1200ITV 1

Transcript

00:00So, let's look at exactly how this works.

00:02Imagine we have a couple here.

00:03The crucial part of this,

00:05one of you needs to be a non-taxpayer.

00:07So you are not earning your full personal allowance

00:09you can earn before you start paying tax on it.

00:12Now, people say, what about if I'm volunteering?

00:13What about if I'm part?

00:14If you don't pay income tax, you're a non-taxpayer.

00:17The other needs to be paying the highest rate of tax

00:20they pay is the basic 20% rate of tax.

00:24In Scotland, as long as you're paying tax,

00:26there are different thresholds there,

00:27but it works roughly the same way.

00:28And clearly you have to be married or civil partners.

00:30Then what happens is this,

00:32each of you have your £12,570 personal allowance.

00:36That's the amount you can earn

00:37that you don't pay tax on each year.

00:38Yep, you all know that?

00:40Okay.

00:41So the non-taxpayer can apply to gov.uk.

00:45I'm gonna give you a question about that later,

00:47there's an issue there.

00:48But apply to gov.uk to move 10% of their tax-free allowance

00:52across to the basic rate taxpayer.

00:54There we go.

00:56Perfect.

00:58The net result of that is the non-taxpayer

01:00now has an allowance of £11,310.

01:04And the taxpayer has a combined allowance of,

01:07it should merge if I'm lucky, there we go, £13,830.

01:11Now that 10% extra tax-free allowance they have,

01:15remember they would have paid tax on it at 20%.

01:18So the gain there is £252 a year.

01:23And that's what moving across works.

01:24And in virtually every circumstance,

01:27even if the person here,

01:29and a little bit above that threshold

01:30where they might pay a little bit of tax,

01:32but as long as the person on this side

01:34is earning over £13,830,

01:36you're always gonna be net up

01:38if there's a non-taxpayer and a taxpayer.

01:40Now, you need to do this quickly

01:42because this year it's each tax year

01:44and the tax year ends on the 5th of April.

01:46You can claim back up to four tax years

01:49as long as you were eligible,

01:51which means a total gain of £1,258 a year.

01:58The way it works,

01:59for the current year your tax code is changed,

02:01for past years they send you a cheque

02:02or they send you a bank transfer.

02:04So the marriage tax allowance is absolutely crucial to do.

02:07There's a but, but I can see you've got questions.

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