PolicyLens

Methodology note

Expand transferable marriage allowance: calculation note

Assumptions behind the Expand transferable marriage allowance scenario. Implementation detail is incomplete, so uncertainty is explicit.

View main policy page: Expand transferable marriage allowance

Central fiscal result

+GBP 18.0bn - Net fiscal impact in 2027-28

Low case: +GBP 8.0bn. High case: +GBP 35.0bn. Positive numbers are fiscal costs or borrowing pressure. Negative numbers are Exchequer savings or receipts.

Scenario and baseline

  • A 25% transferable marriage allowance is introduced.
  • Central case uses UK-wide eligibility for married couples.
  • No automatic benefit offset is assumed.
  • Eligibility for higher-rate taxpayers is unclear.

Affected population

  • Affected units are married couples and civil partners.
  • One-earner couples receive the largest cash gain.
  • Singles and many dual-earner couples gain nothing.
  • Second earners face changed incentives.

Gross impact

  • Current maximum transfer is GBP 1,260.
  • Reform wording implies a much larger transfer.
  • Central cost uses GBP 18bn before wider offsets.
  • Low and high cases reflect eligibility uncertainty.

Fiscal build-up, central case

  • Income-tax receipts lost: +GBP 18.0bn
  • Labour-supply reduction: +GBP 1.0bn
  • Benefit and tax-credit offsets: -GBP 1.5bn
  • Administration: +GBP 0.5bn

Central net impact: +GBP 18.0bn in 2027-28.

Behaviour and pass-through

  • Low case assumes restricted eligibility and lower take-up.
  • Central case assumes broad take-up among eligible couples.
  • High case assumes higher-rate eligibility and weaker second-earner supply.
  • No growth dividend is counted.

Phasing

  • 2026-27: +GBP 2.0bn. Preparation or partial implementation.
  • 2027-28: +GBP 18.0bn. Main scenario year.
  • 2028-29: +GBP 19.0bn. Behaviour and pass-through develop.
  • 2029-30: +GBP 20.0bn. Steady-state uncertainty persists.

Main source groups

  • S1: Reform Contract defines the 25% transferable allowance.
  • S2: Commons Library gives current marriage allowance and thresholds.
  • S3: HMRC ready-reckoners anchor allowance-cost scale.
  • S4: Mirrlees Review supports individual-taxation caution.
  • S5: IFS notes the pledge lacks full government-style costing.
  • S6: Couple-taxation studies inform secondary-earner and targeting risks.