Introduction
In the United Kingdom, the Marriage Allowance is a tax benefit available to married couples and those in a civil partnership. The scheme allows one partner to transfer a portion of their personal allowance to the other, potentially reducing their tax bill. However, you may come across circumstances where you need to cancel your marriage allowance. This article talks about the process of doing so.
What is Marriage Allowance?
The Marriage Allowance allows one spouse or civil partner to transfer up to 10% of their personal allowance to their partner. This could result in a tax reduction of up to £250 in the current tax year.
Why Might You Need to Cancel Marriage Allowance?
- Change in Income: If the lower earning person’s income increases to a rate above the Personal Allowance, the couple will no longer be eligible for the Marriage Allowance.
- Change in Relationship Status: If the marriage or civil partnership ends (through divorce, annulment, or death), the Marriage Allowance will stop at the end of the tax year in which the change occurred.
- Change in Tax Status: If either partner becomes a higher rate taxpayer, the couple will no longer be eligible for the Marriage Allowance.
How to Cancel Marriage Allowance
- Visit the HMRC Marriage Allowance cancellation page.
- Click on the ‘Start now’ button.
- Sign in to your Government Gateway account. If you do not have one, you will need to create one.
- Follow the prompts to cancel the Marriage Allowance.
What Happens After Cancelling?
After cancelling the Marriage Allowance, the recipient partner will no longer benefit from the transferred Personal Allowance. Their tax code will change back to reflect their full Personal Allowance. The person who originally transferred their allowance will also have their tax code changed back, and they’ll regain their full Personal Allowance.
Can You Reapply for Marriage Allowance?
Yes, if your circumstances change again in the future and you meet the eligibility criteria, you can reapply for Marriage Allowance. It’s important to note that you can’t backdate a claim for Marriage Allowance if you’ve cancelled it previously and then wish to reactivate it.
Conclusion
The HMRC Marriage Allowance can be a great way for eligible couples to save on their taxes. However, changes in circumstances may require the cancellation of this allowance. By following the steps outlined above, you can easily cancel your marriage allowance. Always remember to keep a close eye on your tax code changes and contact HMRC if you notice any discrepancies.
