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Personal allowance

Income tax

Your personal allowance is the amount of tax-free income you can have in a year. This depends on your age and can be affected by the level of your income. For couples one of whom is born before 6 April 1935 there is a Married Couple’s Allowance. Blind people can get an additional allowance called the Blind Person’s Allowance. Outlined below are the different types allowances:

  • The Personal Allowance
  • Age Allowance
  • How the Age Allowance works
  • Blind Person’s Allowance
  • Married Couple’s Allowance
  • The ‘Marriage Allowance’

If you use a self-assessment software provider this information can be issued straight to HMRC without the fuss of having to deal directly.

The Personal Allowance

Every tax year you have a basic amount of income that is tax-free. The amount of this ‘personal allowance’ is set for each tax year. The basic personal allowance for the tax year 2018-19 is £11,850.

People with income above £100,000 will have their personal allowance reduced. In situations where their income is high enough they will no longer receive a personal allowance.

From 6 April 2015, 10% of the personal allowance is transferable between spouses and civil partners. This is usually done online. The allowance cannot be transferred if either partner pays higher rate (40%) tax.

Blind Person’s Allowance

A registered blind person with a local authority in England and Wales is entitled to an additional amount of tax-free income. In Scotland or Northern Ireland you will qualify for the allowance if your eyesight is such that you are unable to perform any work where your eyesight is essential.

This allowance is £2,390 for 2018-19. This allowance is given in addition to the usual personal allowance or age allowance. A blind person who has not got enough income to use this allowance can transfer it, or part of it, to his or her husband or wife, or civil partner.

Married Couple’s Allowance

If you're married or in a civil partnership and one of you was born before 6 April 1935, you may be entitled to married couple's allowance (MCA).

What is the MCA?

Married couple's allowance won't increase the amount of income you can receive before you pay tax. Instead, as a 'restricted' allowance, it reduces your tax bill by 10% of the allowance you're entitled to.

If you receive the minimum allowance of £3,360 in the 2018-19-tax year, your tax bill would be reduced by £336.

For the 2017-18-tax year, a lower £3,260 minimum allowance applies, which would reduce your tax bill by £326. 

How MCA works

MCA only applies if one or both of the couple were born before 6 April 1935.  

For the 2018-19-tax year, the maximum MCA is £8,695 

For the 2017-18-tax year, the maximum MCA was £8,455.

However, if your income is above a certain limit, married couple's allowance is reduced by £1 for every £2 of additional income.

Lower and upper income limits for married couple's allowance

Below the table shows the lower and upper earning limits between which you receive some MCA.

Simply, if your income falls below the lower limit, then you'll receive the full MCA. If your income falls between the lower and upper limit, you will receive some MCA but not all.

If your income is above the upper limit shown you'll only receive the minimum MCA. 

The recipient of MCA is normally the husband. However, if you married or became civil partners on or after 5 December 2005, the allowance is given to the partner with the higher income (and is also reduced by reference to their income).

Upper and lower limits for higher age-related married couple’s allowance

Age of recipient

Age of spouse/ partner

Lower limit 2015-2016

Upper limit 2015-2016

Lower limit 2016-2017

Upper limit 2016-2017

Under 66

Under 81

n/a

n/a

n/a

n/a

Under 66

81 or over

27,700

£37,970

27,700

£37,970

66 to 79

Under 81

n/a

n/a

n/a

n/a

66 to 79

81 or over

£27,700

£37,970

£27,700

£37,970

81 or over

Any age

£27,820

£38,090

£27,700

£37,970

If your tax bill is too low to use up all of your married couple's allowance, you can transfer the unused amount to your partner. 

Marriage allowance

Although they don't qualify for MCA, any married couples born after 1935 are able to transfer £1,190 of unused personal allowance (Marriage transferable tax allowance) in 2018-19. The figure for 2017-18 was £1,150. 

If you're set to earn less your personal tax allowance in 2018-19 (£11,850), you can transfer unused allowance to your partner meaning they have less income tax to pay, provided they are a basic-rate taxpayer.