Marriage changes more than just your relationship status — it can also have a meaningful impact on your finances and taxes. Many newlyweds in the UK are unaware of the ways in which marriage (or civil partnership) affects their tax situation, from sharing allowances and transferring assets to inheritance and property ownership rules.
Effective tax planning can help couples save money, reduce liabilities, and build a stronger financial foundation for their future together.
Here’s an in-depth guide to help newly married couples understand their tax position and make the most of the opportunities available to them.
1. Why Marriage Affects Your Taxes
While the UK tax system treats individuals separately for most purposes, being married or in a civil partnershipunlocks several tax benefits and planning opportunities that unmarried couples don’t have access to.
HMRC recognises marriage and civil partnerships under specific rules — meaning couples can transfer certain allowances, share assets without triggering tax, and plan their estates more efficiently.
Understanding these options early on can make a big difference in how much tax you pay each year and how effectively you manage your joint finances.
2. Claim the Marriage Allowance
The Marriage Allowance is one of the simplest and most valuable tax benefits available to married couples in the UK.
It allows one spouse (the lower earner) to transfer a portion of their Personal Allowance — up to £1,260 — to their higher-earning partner, provided both meet certain criteria.
Eligibility:
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You must be married or in a civil partnership.
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One partner must be a non-taxpayer (earning less than £12,570).
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The other must be a basic-rate taxpayer (earning between £12,571 and £50,270).
How It Works:
By transferring £1,260 of unused Personal Allowance, the higher-earning partner’s tax bill is reduced by up to £252 per year.
You can also backdate your claim for up to four previous tax years, potentially saving over £1,000 in total.
Applying is simple — it can be done online through HMRC, and once approved, it renews automatically each year unless your circumstances change.
3. Review Your Income Split
If one partner earns significantly more than the other, it may be worth reviewing how your income and assets are structured.
Although most income is taxed individually, there are legitimate ways to balance income between partners to make full use of tax allowances and lower rates.
For example:
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Savings and investments can be held in the name of the lower earner to reduce tax on interest or dividends.
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Rental income from jointly owned property can be apportioned based on ownership percentage.
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Business owners can consider employing or sharing dividends with a spouse (within legal and commercial limits).
This form of tax planning should always be done carefully and documented properly, ideally with professional advice, to ensure HMRC compliance.
4. Understand How Marriage Affects Capital Gains Tax (CGT)
Marriage introduces one of the most useful tax reliefs: spousal transfers are exempt from Capital Gains Tax (CGT).
This means that assets transferred between spouses or civil partners are treated as being made at “no gain, no loss” — in other words, no CGT is payable when you transfer an asset to your partner.
Why This Matters:
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You can share ownership of investments (e.g., shares, property, or businesses) to make full use of both partners’ annual CGT allowance (£3,000 for the 2025/26 tax year).
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If one partner pays tax at a lower rate, transferring assets before selling them can reduce the overall CGT bill.
It’s a powerful tool for couples managing joint investments or planning the sale of valuable assets.
5. Inheritance Tax (IHT): Marriage as a Shield
Marriage provides one of the most significant protections against Inheritance Tax (IHT).
Under current rules:
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Anything you leave to your spouse or civil partner is exempt from IHT, regardless of value.
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Upon the second partner’s death, their estate can benefit from two Nil Rate Bands (NRBs) — effectively doubling the amount that can be passed on tax-free.
Current Thresholds (2025/26):
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Nil Rate Band: £325,000 per person.
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Residence Nil Rate Band: Up to £175,000 per person (for property left to direct descendants).
Together, this means a married couple can pass on up to £1 million tax-free to their children or heirs, depending on circumstances.
Without marriage or civil partnership, these exemptions do not apply — making estate planning far more costly for unmarried couples.
6. Managing Joint Property Ownership
If you own property together, it’s crucial to understand how ownership structure affects tax and inheritance.
There are two main ways to own property jointly:
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Joint Tenants: Both partners own the entire property equally. If one dies, ownership automatically passes to the other.
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Tenants in Common: Each partner owns a defined share (e.g., 60/40). These shares can be passed to others via a will.
Tax Implications:
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For rental properties, income is taxed according to ownership share. Married couples can alter this split by submitting Form 17 to HMRC, ensuring the most tax-efficient division.
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Stamp Duty Land Tax (SDLT) rules also differ when one partner already owns a property, so advice should be sought before purchasing jointly.
Joint ownership has legal as well as financial consequences — so couples should review both when buying or transferring property.
7. Consider National Insurance and Pension Planning
Marriage doesn’t merge your National Insurance (NI) records, but it can still influence long-term pension outcomes.
For instance:
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A non-working spouse can benefit from credits if they claim Child Benefit or are caring for children under 12.
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If one partner hasn’t built up enough qualifying years for the State Pension, they may be entitled to claim a pension based on their spouse’s contributions (subject to eligibility).
Additionally, contributing to a spousal pension can be an effective tax-efficient strategy. The higher earner can fund a pension for their lower-earning spouse, reducing overall tax while boosting joint retirement savings.
8. Review Your Tax Codes and PAYE Settings
After marriage, it’s good practice to check your tax codes with HMRC — especially if one of you claims Marriage Allowance or experiences a change in employment.
Incorrect codes can lead to over- or under-paying tax. You can review and update these easily through your HMRC Personal Tax Account online.
9. Plan Charitable Giving Together
Charitable donations made through Gift Aid can reduce tax liabilities, but planning donations as a couple can amplify the benefit.
If one partner is a higher-rate taxpayer, they can claim additional relief on Gift Aid donations, while the charity still receives the full 25% uplift.
Couples may wish to consolidate charitable giving through the higher earner for maximum tax efficiency — while keeping donations in line with shared values and goals.
10. Use ISAs and Joint Savings Strategically
While ISAs (Individual Savings Accounts) remain individually held, couples can double their tax-free investment allowance by each using their full annual limit — currently £20,000 per person.
This means a couple can shelter up to £40,000 per year from income and capital gains tax.
By coordinating savings and investment strategies — such as keeping one partner’s ISA focused on cash savings and the other’s on stocks and shares — couples can balance risk and optimise tax efficiency.
Joint bank accounts themselves don’t carry specific tax advantages, but they simplify record-keeping and ensure transparency in shared finances.
11. Make the Most of Personal and Dividend Allowances
Each partner in a marriage has their own set of tax allowances — including:
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Personal Allowance (£12,570)
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Savings Allowance (£1,000 for basic rate taxpayers)
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Dividend Allowance (£500 for 2025/26)
Couples can structure their investments to ensure neither partner wastes their allowances.
For instance, if one partner has unused allowances, they could hold more interest-bearing savings or dividend-paying shares. This approach spreads income efficiently and avoids one partner crossing into a higher tax bracket unnecessarily.
12. Planning for the Future: Wills and Estate Documents
Marriage automatically revokes any previous will (unless it was made in contemplation of marriage).
Newlyweds should create or update their wills as soon as possible to reflect their current wishes and ensure assets pass according to their intentions.
Estate planning also includes reviewing:
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Life insurance policies and beneficiary designations.
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Pension nominations to ensure death benefits go to the surviving spouse.
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Powers of attorney in case of future incapacity.
Taking these steps provides peace of mind and ensures that the tax advantages of marriage are fully realised in estate planning.
13. When to Consider Professional Advice
While many tax benefits for couples are straightforward, more complex situations — such as property portfolios, international income, or business ownership — require specialist support.
A qualified tax adviser can help ensure you’re fully compliant while making the most of every available relief.
Firms like My Tax Accountant provide expert guidance on personal and marital tax planning, helping couples identify savings opportunities, manage declarations, and plan for long-term financial goals.
Investing in sound professional advice early on often pays for itself many times over in saved tax and reduced stress.
14. Common Mistakes Newly Married Couples Make
Even well-intentioned couples can fall into tax traps if they don’t plan properly. Here are some frequent errors to avoid:
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Failing to claim Marriage Allowance — one of the simplest and most overlooked benefits.
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Keeping assets inefficiently allocated — resulting in higher tax bills.
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Not updating HMRC or payroll — leading to incorrect tax codes.
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Ignoring will and estate updates after marriage.
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Assuming joint ownership always means equal tax treatment — which isn’t necessarily true.
Staying organised and proactive helps avoid these pitfalls.
15. Building a Tax-Smart Financial Partnership
Marriage is a partnership — and that includes managing money and taxes together.
Couples who discuss their financial goals openly tend to make better decisions about spending, saving, and investing. Setting aside time each year to review your tax situation — before the end of the tax year in April — ensures you’re not missing opportunities or paying more than you need to.
Keeping good records, communicating clearly, and involving a professional when needed are the hallmarks of a financially savvy partnership.
Conclusion
Marriage opens the door to a range of financial and tax planning advantages, but these benefits only materialise if couples take the time to understand and act on them.
From claiming the Marriage Allowance to structuring joint investments, optimising property ownership, and planning for the future through wills and inheritance strategies, there are numerous ways for newlyweds to make their money work harder.
By approaching taxes as a shared responsibility and integrating them into your broader financial planning, you can ensure your marriage isn’t just emotionally rewarding — but financially resilient too.
After all, the right tax planning today lays the foundation for a secure and prosperous future together.
