Most people in the UK know that the standard Personal Allowance currently sits at £12,570. That is the amount you can earn before paying income tax.
But fewer people realise there is a perfectly legal rule that can lift your effective tax‑free allowance above that level — in some cases up to £13,006.
The update from HM Revenue and Customs has brought fresh attention to this lesser‑known provision, which many eligible couples still do not claim.
So how does it work? Who qualifies? And could it apply to you?
Here’s a clear, straightforward guide designed for UK taxpayers who want to understand exactly what this rule means in practice.
What Is the Standard Personal Allowance
The Personal Allowance is the amount of income you can receive each tax year before paying income tax.
For most people in the current tax year, it stands at £12,570.
This applies to income from:
Employment
Private pensions
The State Pension
Self‑employment
Once your total taxable income exceeds £12,570, income tax is charged at the relevant rate.
But for some households, that allowance can effectively be increased.
The Little‑Known Rule Explained
The rule in question is called the Marriage Allowance.
Marriage Allowance allows one partner to transfer a portion of their unused Personal Allowance to their spouse or civil partner.
Specifically, you can transfer £1,260 of your Personal Allowance.
20 percent of £1,260 equals £252.
So while your official allowance does not rise to £13,830, your partner’s tax bill is reduced by up to £252 — which effectively lifts their usable tax‑free income to around £13,006 before tax applies.
That is where the £13,006 figure comes from.
How the £13,006 Figure Is Calculated
Let’s break it down clearly.
Standard Personal Allowance: £12,570
Transferable amount: £1,260
Tax saved at 20%: £252
£12,570 + £436 (effective tax‑free benefit from the £252 saving) = approximately £13,006 in effective tax‑free income value.
In simple terms, you pay less tax on your earnings — meaning more of your income stays in your pocket.
Who Qualifies for Marriage Allowance
You may qualify if:
You are married or in a civil partnership
One partner earns less than £12,570
The other partner is a basic rate taxpayer
The higher‑earning partner must earn below the higher rate tax threshold.
If either partner pays higher or additional rate tax, you cannot claim.
This is designed to support households where one partner has little or no income.
Why So Many People Miss Out
Despite being available for several years, millions of eligible couples have never applied.
Common reasons include:
Not realising the scheme exists
Assuming it is applied automatically
Believing both partners must be working
Confusion about eligibility
In reality, it must be actively claimed through HMRC.
It is not applied automatically when you get married.
Does It Apply to Pensioners
Yes.
Marriage Allowance can apply to pensioner couples if the conditions are met.
For example, if one partner receives only a small pension below £12,570 and the other receives taxable pension income within the basic rate band, the allowance can be transferred.
Many retired couples are eligible but unaware.
Because the State Pension is taxable (though paid gross), this can be especially relevant in retirement.
How to Apply
Applications are made directly through HMRC’s website.
You will need:
Both partners’ National Insurance numbers
Proof of identity
Basic income information
The process usually takes only a few minutes online.
Once approved, the recipient’s tax code is adjusted to reflect the allowance transfer.
Can You Backdate a Claim
Yes.
One of the most valuable features of Marriage Allowance is that you can backdate your claim for up to four tax years.
This means eligible couples could receive a lump sum refund worth up to £1,000 if they qualified in previous years but did not claim.
That refund is paid directly into your bank account.
Many couples are surprised by how much they can recover.
How It Appears on Your Tax Code
Once approved, the receiving partner’s tax code is adjusted.
The partner transferring the allowance receives a reduced Personal Allowance.
The net effect is a tax saving for the household.
You may see your tax code change slightly — this is normal.
Always check HMRC correspondence to confirm accuracy.
Does It Affect Benefits
Marriage Allowance relates to income tax, not benefits.
It does not affect entitlement to:
Universal Credit
Pension Credit
Housing Benefit
However, because it increases net income slightly, it may influence overall household finances.
For most couples, the impact is positive.
What If Circumstances Change
If your income changes and the higher‑earning partner moves into higher rate tax, you must cancel the Marriage Allowance.
Similarly, if you separate or divorce, the transfer ends.
Keeping HMRC informed avoids future adjustments or overpayments.
Why HMRC Is Highlighting It Again
HMRC has renewed efforts to promote Marriage Allowance because uptake remains lower than expected.
At a time when household budgets are stretched, ensuring eligible couples claim available relief is increasingly important.
Many households could benefit from an extra £252 per year — particularly during retirement or single‑income periods.
Real‑World Example
Imagine a retired couple:
Partner A receives £8,000 per year from a small pension.
Partner B receives £18,000 from a combination of pensions.
Partner A is not using their full Personal Allowance.
By transferring £1,260 of unused allowance, Partner B’s tax bill reduces by £252.
That is a direct saving — without increasing income or working more hours.
Over four years, that equals more than £1,000.
Common Misunderstandings
Both partners must earn the same – False
It is automatic – False
It only applies to working couples – False
It increases your official allowance to £13,006 – Not exactly, but it creates that effective benefit
Clarity is key when understanding how tax relief works.
Is It Worth the Effort
For most eligible couples, absolutely.
The application is simple.
The tax saving is real.
The claim can be backdated.
Few financial decisions offer a guaranteed return with no risk.
This is one of them.
When It May Not Be Suitable
If both partners earn more than £12,570, there is no unused allowance to transfer.
If the higher‑earning partner pays higher rate tax, the scheme does not apply.
In those cases, other tax planning options may be more appropriate.
Key Points to Remember
The rule relates to Marriage Allowance.
It can reduce tax by up to £252 per year.
It may be backdated for four years.
It applies to eligible married or civil partner couples.
It is not automatic — you must apply.
Final Thoughts
The headline figure of £13,006 may sound surprising at first glance, but it reflects the very real benefit available under Marriage Allowance rules.
At a time when many households are reviewing their finances carefully, overlooking a guaranteed tax saving makes little sense.
If you are married or in a civil partnership and one partner earns less than the Personal Allowance threshold, it is worth checking your eligibility.
A simple online application could reduce your tax bill this year — and potentially generate a refund for previous years.
Sometimes the most valuable financial opportunities are not new schemes or complex investments, but small, overlooked rules already sitting quietly in the tax system.