What tax allowances am I entitled to?

Am I eligible for tax allowances?

You only pay income tax on taxable income in excess of your tax allowances. Income that is covered by your personal allowance still remains taxable income, but it means you will not have to pay any tax on that part of your income. This is important if you need to consider whether or not your income needs to be reported for other purposes, such as tax credits.

Generally, you are only eligible for the UK personal allowance (and, if you qualify, the blind person’s allowance) if you are:

• resident in, or a national of, the United Kingdom (including if you are a Scottish taxpayer or a Welsh taxpayer);
• a national of an EEA country;
• resident in the Isle of Man or the Channel Islands;
• formerly resident in the UK but resident abroad for the sake of the health of either you or a member of your family who lives with you; or
• you are employed in the service of:
  • the Crown (or if this applied to your late spouse or civil partner);
  • any territory under His Majesty’s protection; or
  • a missionary society.

In addition, you may be able to claim a UK personal allowance under the terms of a double taxation agreement. There is more information in the guidance to form R43 on GOV.UK.

If you are resident in the UK but not domiciled in the UK and you claim to use the ‘remittance basis’ of taxation, you may not be eligible for UK tax allowances. More information on residence and domicile can be found in our migrants section.

There is also a personal savings allowance and a dividend allowance, which are sometimes referred to as the savings nil rate and the dividend nil rate respectively. Despite their names, they do not work as tax allowances – in effect, they are nil (0%) rate bands of tax for specific types of income (that is, savings income and dividend income). We explain more about the personal savings allowance and dividend allowance when we look at tax rates.

What is the personal allowance?

The personal allowance is a tax allowance that is available to most people who are resident in the UK. The personal allowance reduces the amount of taxable income on which you pay tax. Taxable income which is not actually taxed because of the personal allowance is still taxable income. Using the personal allowance against this income does not make it tax-free, it just means that you may not have to pay tax on that part of your income. This is important, for example because means-tested benefits often consider whether or not income is taxable when determining what income is taken into account.

Example

LITRG What tax allowances am I entitled to? by LITRG

The basic personal allowance is £12,570 for 2023/24.

If your income is below your personal allowance, meaning you do not make full use of your personal allowance, you lose the unused part. However, you can choose to give up part of your personal allowance in order to give your spouse or civil partner a reduction in their tax bill. This is known as the marriage allowance (transferable tax allowance for married couples and civil partners).

You cannot carry any unused personal allowance backwards or forwards to a different tax year.

The personal allowance is reduced if your ‘adjusted net income’ is over £100,000, but we aim this guidance at low-income taxpayers so do not cover this issue here.

You can use your personal allowance to reduce the amount of taxable income on which you pay tax in the way which will minimise your tax liability. It is usually best to use your personal allowance against earned income or non-savings income first, but this is not always the case.

You can see how allowances work to reduce the income you pay tax on in the example Cheng.

What is the blind person's allowance?

Blind person's allowance (BPA) reduces the amount of taxable income that you have to pay tax on. If you are eligible for BPA, you are entitled to it in addition to the personal allowance.

The BPA for 2023/24 is £2,870. If you do not have enough income to use any or all of the BPA yourself, you can claim to transfer it in full (or whatever is left of it) to your spouse or civil partner.

If you are entitled to BPA, you must tell HM Revenue & Customs (HMRC) about it. You can find out how to contact them about BPA on GOV.UK.

You do not have to be entirely without sight to claim the BPA, but you do have to meet one of the following criteria:

• You can claim if you are registered as severely sight impaired with a local authority in England and Wales;
  or
• If you live in Scotland or Northern Ireland, your sight must be so bad as to stop you performing any work for which eyesight is essential.

Entitlement to BPA does not depend on your age.

The amount of BPA to which you are entitled does not depend on your level of income. The BPA is not reduced where your income is more than a certain amount.

If both you and your spouse or civil partner are entitled to claim BPA, you can each claim it independently.

You can find contact details for HMRC and form 575(T) for transferring surplus BPA to your spouse or civil partner on GOV.UK.

The English and Welsh system in more detail

An eye specialist can check your sight and, if appropriate, certify that you are severely sight impaired. You can ask your GP to refer you to an eye specialist.

Social Services should then contact you to see if you want to be added to the register, and if you do, then the date that the consultant signed your certification form is the date of registration.

Once you are registered, contact HMRC as soon as possible and tell them that you want to claim BPA.

If, in the previous tax year, you obtained evidence of severe sight impairment on which the registration will be eventually made, but you only registered the following tax year, you can claim the relief for both years.

What is the marriage allowance (transferable tax allowance for married couples and civil partners)?

⚠️ The marriage allowance is also known as the transferable tax allowance for married couples and civil partners. It should not be confused with the married couple’s allowance.

You can give up some of your personal allowance to provide your spouse or civil partner with a tax credit, if you both meet certain conditions.

The marriage allowance is available to all spouses and civil partners. However, if one of you was born before 6 April 1935, you should claim the married couple’s allowance instead as it will usually be more beneficial.

The marriage allowance for 2023/24 is £1,260 and broadly it enables a spouse or civil partner who is not liable to income tax at a rate higher than the basic rate (or higher than the intermediate rate if a Scottish taxpayer) to give up £1,260 of their personal allowance to provide their spouse or civil partner with a tax credit of £252. The recipient spouse or civil partner also must not be liable to income tax above the basic rate (intermediate rate if a Scottish taxpayer). When calculating the highest tax rate at which either spouse is liable you should ignore the dividend nil rate band (dividend allowance) and consider whether the dividend income would be liable to the dividend upper rate (33.75%) were it not for the dividend nil rate band.

The ‘mechanics’ of the marriage allowance can be illustrated as follows:

Transferable tax allowance 'mechanics' by LITRG

Example

In the tax year 2023/24 John, who lives in England, has a state pension and private pension totalling £49,500. He also has dividend income of £1,000. He does not make any Gift Aid contributions in the year.

John’s total income is £50,500. Although he is able to use the dividend allowance of £1,000, meaning that he does not pay any tax at the higher rate or dividend upper rate, he must ignore the dividend allowance when deciding whether or not he can take advantage of the marriage allowance. With income of £50,500, John would pay tax on £230 of income at the dividend upper rate, meaning that he is not entitled to the marriage allowance.

The maximum tax saving you can get as a couple from the marriage allowance is £252 for the 2023/24 tax year.

Note that the recipient spouse or civil partner does not receive an extra personal allowance of £1,260: instead they receive a tax credit of £252 that can be set against their tax liability. If the full tax credit cannot be used by the recipient, the balance will not be repaid, nor will the personal allowance of the person giving up part of their allowance be readjusted.

You can apply for marriage allowance online on GOV.UK. If you cannot claim online, you can telephone HMRC on 0300 200 3300 to make the claim or download our marriage allowance template letter to make the claim.

You can see how the marriage allowance works in the example Marjorie.

If you make the claim before 6 April 2024 for the tax year 2023/24, the claim continues until either you withdraw it or the recipient spouse or civil partner does not obtain a tax advantage. On the other hand, if you make the claim after the end of the relevant tax year, it will only have effect for the tax year to which the claim relates. So, if you make a claim after 5 April 2024 for 2023/24, you would need to make another claim for 2024/25 if appropriate.

The claim can be made up to four years from the end of the relevant tax year. In other words, a claim for marriage allowance for the tax year 2023/24 must be made by 5 April 2028. Since 29 November 2017, it has been possible to make a claim even if one of the parties to the marriage or civil partnership is no longer alive – for more information, see our page Death of a spouse or civil partner. The first year that the marriage allowance was available to be claimed was 2015/16. Any claims for that year had to be made by 5 April 2020. From 6 April 2023, claims for the 2016/17, 2017/18 and 2018/19 tax years are also out of time.

If you wish to withdraw the claim, for example because it is no longer beneficial, you should note that only the individual who originally made the claim (by allowing their personal allowance to be reduced) may withdraw the election. The withdrawal of the election then only takes place from the start of the following tax year. For example, let us assume a marriage allowance claim has been in place since 2015/16 and is continuing. If the election is withdrawn in August 2023, the marriage allowance claim will continue for the tax year 2023/24, but then not be applied from 6 April 2024.

⚠️ Warning: if you decide to claim the marriage allowance you must claim all of it (£1,260 in 2023/24). In some cases, this could increase your total tax bill as a couple and leave you worse off overall. This may happen if your income is more than 90% of the personal allowance (that is, more than £11,310 in 2023/24) and your spouse or civil partner’s income is less than 110% of the personal allowance (that is, less than £13,830 in 2023/24).

You can see how this can happen in the example John.

If your incomes are variable, it may be better to wait until you are certain before making the claim.

In order to make an election for marriage allowance for a given tax year, it is necessary that you are married to, or in a civil partnership with, the same person (that is, the person who will be receiving the allowance) for:

• the whole or part of the tax year concerned; and
• at the point the election is made (or if the election is made after the death of one or both of the parties, then when they were both last living).

The marriage allowance is therefore available in full, if the conditions are otherwise met, for the year in which the marriage or civil partnership takes place.

Similarly, if you separate from your spouse or civil partner in a tax year, the marriage allowance is still available in full for that year if the conditions are otherwise met, but note that the election must have been made prior to the separation. The marriage allowance is not available for any tax year after your marriage has ended (by divorce) or your civil partnership has been dissolved. It is not possible to claim the marriage allowance after you are divorced or your civil partnership is dissolved, even if the claim would be for a time when you were still married or in a civil partnership.

If an election is withdrawn, it usually has effect for the tax year after the one in which the notice was given. However, if the marriage or civil partnership comes to an end during the year in which the election is withdrawn, the marriage allowance is withdrawn for that year. So, if the election is withdrawn in August 2023 and the marriage or civil partnership comes to an end during the tax year 2023/24, then the allowance will not be available for 2023/24. For this purpose (withdrawing the claim for marriage allowance), the marriage or civil partnership is deemed to come to an end at divorce, dissolution of civil partnership or if there is a formal separation agreement.

Note that if the recipient spouse or civil partner is in employment or is paid a pension (other than the state pension) their PAYE code may be amended as if they received an extra £1,260 (for 2023/24) of allowances. This is indicated by the addition of an ‘M’ to the tax code. Similarly, the individual giving up part of their allowance should have an ‘N’ after their primary tax code (if they have one).

What is the married couple's allowance?

The married couple's allowance (MCA) does not reduce the amount of taxable income on which you pay tax. It is used to calculate an amount to reduce your tax bill instead.

You are only entitled to MCA if you are married or in a civil partnership and at least one of you was born before 6 April 1935.

There is more information on the MCA, including examples, in the pensioners section.

What is relief for maintenance payments?

Maintenance payments relief does not reduce the amount of taxable income on which you pay tax. It is used to calculate an amount to reduce your tax bill instead.

Maintenance payments relief is being phased out. You are only entitled to the relief if you meet all of the following conditions:

• You are separated or divorced or your civil partnership has been dissolved.
• You, or your ex-spouse or former civil partner, were born before 6 April 1935.
• You are making maintenance payments by Court Order.
• The maintenance payments are for the benefit of your ex-spouse or former civil partner or for your children under the age of 21.
• Your ex-spouse or former civil partner is not remarried or in a new civil partnership.

Maintenance payments relief works by deducting 10% of the relief from the tax due on your taxable income.

For 2023/24 the maximum relief is £4,010 (this is the same as the married couple’s allowance for the year). This means you get a deduction of £401 from your tax liability.

If your maintenance payments are lower than £4,010, your deduction is 10% of the amount of maintenance you pay.

Can I transfer my allowances to my spouse or civil partner?

We are often asked if married couples or civil partners can transfer their tax allowances to their spouse or partner if they do not use them. Some allowances are transferable, but others are not.

Marriage allowance (transferable tax allowance for married couples or civil partners)

You can read about this above.

Blind person's allowance (BPA)

You can transfer the BPA to your spouse or civil partner, if your income is too low to make use of it. Your surplus BPA can then reduce the amount of taxable income on which your partner pays tax. If you are a non-taxpayer and your spouse or civil partner pays tax you can still transfer your BPA to them.

You can transfer the BPA by contacting HMRC.

You can see how transferring surplus BPA works in the example Paul.

Married couple's allowance (MCA)

You can transfer the MCA to your spouse or civil partner, if your income is too low to make use of it. We give the full rules in our pensioners section.

If you are claiming both BPA and MCA you cannot transfer one allowance and not the other. You must transfer both allowances together. There is more information including an example in the pensioners section.

How does marriage or civil partnership separation affect my tax allowances?

Married couple’s allowance and maintenance payments relief

Separation affects your MCA and may mean you become entitled to maintenance payments relief. As noted above, both of these allowances apply only if either you or your spouse or civil partner was born before 6 April 1935.

HMRC will treat you as living together if you are separated due to circumstances beyond your control, for example, if one of you is taken into a nursing home or hospitalised long term.

For MCA and maintenance payments relief purposes you are treated as living with your spouse or civil partner unless you are separated:

• under an order of a Court, or
• by a formal deed of separation executed under seal, except in Scotland, where the deed should be witnessed, or
• in such circumstances that the separation is likely to be permanent.

There is further information on the tax effects of separation in the capital gains tax section.

Married couple’s allowance

You can get MCA in full in the year that you separate.

If you and your spouse or civil partner are later reconciled the allowance is available for the tax year of reconciliation. If this is also the year in which you separated, the allowance is given without any break.

Maintenance payments

Full maintenance payments relief is available in the year of separation, but relief is not available after the spouse or civil partner remarries or registers a new civil partnership.

Marriage allowance (transferable tax allowance for married couples or civil partners)

Marriage allowance is available where an election is made and the two individuals concerned are married or in a civil partnership for the whole or part of the tax year concerned. This means that marriage allowance is still available if you are separated from your spouse or civil partner.

You can get marriage allowance in full in the year that your marriage or civil partnership ends – an election remains in place in the tax year of the end of the marriage or civil partnership, unless the person giving up part of their allowance revokes their claim.

For the purposes of marriage allowance, a marriage comes to an end if any of the following are made:

• decree absolute of divorce (decree of divorce in Scotland)
• decree of nullity (declarator of nullity in Scotland)
• decree of judicial separation (decree of separation in Scotland)

A civil partnership comes to an end if any of the following are made:

• dissolution order or nullity order, which has been made final (decree of dissolution or a declarator of nullity in Scotland)
• separation order (decree of separation in Scotland)

What are the trading and property allowances?

Since 6 April 2017, there have been two allowances available to individuals: the ‘trading allowance’ and the ‘property allowance’. Each allowance is £1,000.

There is more information about the trading allowance in the self-employment section; there is more information about the property allowance in the other tax issues section.

Examples

Cheng: personal allowance – taxable income

Cheng has total taxable income of £14,570 for 2023/24. She is not married, is UK resident and domiciled and has no other income.

Cheng will pay tax on £2,000:

	£
Total taxable income	14,570
Less: personal allowance	(12,570)
Cheng pays tax on	2,000

Paul: surplus blind person's allowance (BPA)

Paul is married to Janet. Janet is employed and her salary is £19,450 for 2023/24.

Paul's income before allowances for 2023/24 is £6,000, which is much less than his personal allowance of £12,570.

Paul is eligible for and claims BPA, but the allowance is wholly surplus to his needs. He therefore claims to transfer the whole amount of £2,870 to Janet. This, together with her own personal allowance, reduces the income she has that is charged to tax for 2023/24. They can also claim the marriage allowance, so Paul gives up £1,260 of his personal allowance – this gives Janet a tax credit of £252 to set against her tax payable.

Janet's tax liability for 2023/24 is therefore:

	£
Total taxable income	19,450
Less: Janet's personal allowance	(12,570)
Less: Transfer of Paul's BPA	(2,870)
Janet pays tax on	4,010
Her tax bill is therefore:
£4,010 x 20% Minus marriage allowance tax credit	802 (252)
Tax due	550

Note: If Janet is not able to use all of the £252 tax credit that the marriage allowance gives her, it is lost, or wasted.

Marjorie: marriage allowance (transferable tax allowance for married couples or civil partners)

This example uses UK income tax rates and bands; the position may be different if you are a Scottish taxpayer.

Marjorie is married to Carl. Marjorie works part-time and her salary is £9,000 for 2023/24.

Carl works full-time and his salary is £21,500 in 2023/24.

Marjorie and Carl are both eligible for the full personal allowance of £12,570. As Marjorie’s income is only £9,000, she is not using £3,570 of her personal allowance.

Under the rules for the marriage allowance, Marjorie can choose to give up £1,260 of her unused personal allowance which gives Carl a tax credit of £252 which reduces the amount of tax he has to pay.

Carl’s tax for 2023/24 is therefore calculated as follows:

	£
Total taxable income	21,500
Less: Personal Allowance	(12,570)
Income on which tax is charged	8,930
Income tax due (at 20%)	1,786
Marriage allowance tax credit	(252)
Final tax liability	1,534

John: marriage allowance (transferable tax allowance for married couples or civil partners)

This example uses UK income tax rates and bands; the position may be different if you are a Scottish taxpayer.

John and Andrew, both born in 1960, are civil partners. John works part-time and his salary is £11,900. Andrew normally works full time, but in 2023/24 he takes some unpaid leave and his salary for the year is £12,950.

If John keeps his full personal allowance his tax bill is £0 (£11,900 is less than £12,570) whilst Andrew’s is £76 (£12,950 - £12,570 = £380 at 20%). So, as a couple, their total tax bill is £76.

If John gives up £1,260 of his personal allowance then his tax bill will increase to £118 (£11,900 - £11,310 = £590 at 20%) whilst Andrew’s will reduce to £0 (£76 original liability less tax credit £252; balance of tax credit is not repayable), making their total tax bill £118. They have paid £42 more tax as a couple by John giving up part of his personal allowance which gives Andrew a tax credit than they would have done if John had kept his full personal allowance.