Income Tax Act 2007 section 55C

Election to reduce personal allowance

Section 55C sets out the conditions an individual must satisfy in order to elect to transfer part of their personal allowance to their spouse or civil partner under the marriage allowance provisions.

• The individual must be married or in a civil partnership for all or part of the tax year, be entitled to a personal allowance, and — after the reduction in their allowance — must only be liable to tax at the basic rate or below (including the savings nil rate, dividend nil rate, starting rate for savings, and equivalent Scottish and Welsh basic rates).
• Where the individual would be taxable at the dividend nil rate, they must not be taxable at the dividend upper rate or dividend additional rate if the dividend nil rate band were ignored — this prevents higher-rate dividend taxpayers from benefiting.
• Non-UK residents who qualify for a personal allowance through the residence rules must have hypothetical net income below their personal allowance — hypothetical net income being calculated as if the individual were UK resident, not a qualifying new resident, not treaty-resident elsewhere, and had claimed all available double taxation relief.
• An election can be made by the individual's personal representatives after death, covering either the tax year of death or any earlier tax year.