Married Couple’s Allowance
for the tax year 2008-09
This guide explains how the age-related Married Couple’s Allowance is
calculated depending on your age and how much taxable income you have.
To find out more about how the Married Couple’s Allowance works read the
related guide ‘Married Couple’s Allowance - includes civil partnerships’
- you’ll find the link under ‘Further information’ at the end of the page.
On this page:
How much Married Couple’s Allowance might you get?
Married Couple’s Allowance (MCA) rates
Under 75 |
£2,540 |
£6,535 |
£21,800 |
75 or over |
£2,540 |
£6,625 |
£21,800 |
The maximum amount of Married Couple’s Allowance for someone aged 75
or over is £6,625 and the minimum amount is £2, 540. You receive 10 per
cent of the allowance amount. - which means your tax saving (based on
a full year's eligibility) is at least £254 and up to £662.50. The actual
amount depends on the claimant's income - as explained below.
Effect of claimant's income on Married Couple’s Allowance
If your income is over £21,800 we will reduce the Married Couple’s Allowance.
The amount of the reduction is worked out as follows:
- HM Revenue & Customs (HMRC) deducts half of your income - £1 for every
£2 - that's over the limit from your age-related Personal Allowance,
until the basic level of Personal Allowance is reached
- they take anything that's left off the Married Couple’s Allowance,
until they reach the minimum amount - you'll always get the minimum
Married Couple’s Allowance (10% of £2,540)
- if your income doesn't reduce the age-related Personal Allowance to
the basic level, then HMRC doesn't reduce the Married Couple’s Allowance
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Examples of the effect of your age on Married Couple’s
Allowance
Example - under 75
You're 74, married and have taxable income of £18,000:
- Your taxable income is £18,000.
- Your tax-free Personal Allowance is £9,030 (the age-related Personal
Allowance for people aged 65 to 74).
- HMRC subtracts your tax-free allowance (£9,030) from your taxable
income (£18,000) - that leaves you with taxable income of £8,970. Your
tax bill on this income is £1,794 (£8,970 x 20%).
- They then use your Married Couple’s Allowance to reduce your tax
bill. Your Married Couple’s Allowance is £653.50 (10% of £6,535 - the
maximum rate for under 75s).
Your tax bill is reduced to £1,140.50 (£1,794 - £653.50).
Example - 75 or over
You’re 77, married and have taxable income of £18,000:
- Your taxable income is £18,000.
- Your tax-free allowance is £9,180 (the age-related Personal Allowance
for 75s or over).
- HMRC subtracts your tax-free allowance (£9,180) from your taxable
income (£18,000) - that leaves you with taxable income of £8,820. Your
tax bill on this income is £1,764 (£8,820 x 20%).
- They then use your Married Couple’s Allowance to reduce your tax
bill. Your Married Couple’s Allowance is £662.50 (10% of £6,625 - the
maximum rate for 75s or over)
Your tax bill is reduced to £1,101.50 (£1,764 - £662.50).
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Examples of the effect of your income on Married Couple’s
Allowance
Example
You're 74, married or in a civil partnership and have taxable income
of £29,400. HMRC subtracts the income limit (£21,800) from your taxable
income (£29,400) - this shows that you're £7,600 over the limit. They
take half of this (£3,800) off your allowances like this:
- first they reduce your age-related Personal Allowance of £9,030 by
£2,995 to the minimum basic Personal Allowance of £6,035 - this leaves
£805 (£3,800 - £2,995)
- next they subtract £805 from the higher Married Couple’s Allowance
entitlement (£6,535) bringing it down to £5,730
- your Married Couple’s Allowance is £573 (10% cent of £5,730)
This is the amount by which HMRC will reduce your tax bill.
Example
You’re 77, married or in a civil partnership and have taxable income
of £29,400. HMRC subtracts the income limit (£21,800) from your taxable
income (£29,400) - this shows that you’re £7,600 over the limit. They
take half of this (£3,800) off your allowances like this:
- first they reduce your higher age-related Personal Allowance of £9,180
by £3,165 to the minimum basic Personal Allowance of £6,035 - this leaves
£655 (£3,800 - £3,145)
- next they subtract £655 from the higher Married Couple’s Allowance
entitlement (£6,625) bringing it down to £5,970
- your Married Couple’s Allowance is £597 (10% of £5,970)
This is the amount by which HMRC will reduce your tax bill.
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Further information
To find out more about how the Married Couple’s Allowance works read
the related guide ‘Married Couple’s Allowance - includes civil partnerships’
Married Couple’s Allowance
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