MSE News: Couples now able to register to shift tax allowance between spouses

p00hsticks

mintypeas wrote: »

can anyone help!! i transfered some of my allowance to my husband and received a letter this morning from hmrc well here goes:
april 2015/april 2016
personal allowance £10600
transfer of allowance £1060
total tax free amount£11660

this i understand now next bit im confused!!
april 2016/april 2017

personal allowance £1004
transfer of allowance £1100
total tax free amount £2104

also his tax code has gone from 1166m x to 210t

can anyone help me understand such a massive loss.

Presumably these are the figures for your husband rather than you, as they seem to show someone in receipt of the extra Marriage allowance amount, rather than having it transferred from them ?

The problem doesn't seem to relate to MA, which looks to have been applied correctly, but rather why he has a starting personal allowance of only £1004 rather than the standard £11,000 for 2016-17. What does his coding notice say to explain the reason for this (and the resulting 'T' suffix) - it should give some explanation ?

Darksparkle

mintypeas wrote: »

its extremely weird as it is a big difference. his annual is £29120 so cant work it out should i not of transferred my allowance?

He isn't higher rate so no reason why you shouldnt have.

le_loup

Does he receive state pension? That wold reduce his annual allowance.

dori2o

There has been an issue recently with the 16/17 tax codes with regards to the system calculated estimated income for 16/17, which in some cases has been increased to stupid amounts. It's possible this is what has happened. In cases where there is a reduced personal allowance there should be an advisory note which will show the income used when calculating the code.

This isn't something that can be resolved over a forum, your husband will need to contact HMRC to update his estimated pay, or see if there is any other reason why his PA has been reduced.
In theory this code shouldn't be possible if the system has calculated an estimated pay of more than £100k as the transfer of allowances is only applicable to those who are basic rate taxpayers. You cannot claim the transfer if you are a 40 or 45% taxpayer.
This issue I believe has been escalated and a fix is expected to be found and all affected codes automatically corrected. But my advice would definitely be to call HMRC and get the code looked at.

mynuts

I am a bit confused about the transfer of allowances , money saving expert says that if your partner earns less than the £10,600 personal allowance you can transfer some of their tax allowance to your allowance , but the online form asks" Does your spouse or civil partner have an annual income of between £10,601 and £42,385?" .


I am 60 years old in fulltime employment and my wife is 63 and receives the state pension , am I entitled to transfer some of my wifes allowance to mine ?

Darksparkle

mynuts wrote: »

I am a bit confused about the transfer of allowances , money saving expert says that if your partner earns less than the £10,600 personal allowance you can transfer some of their tax allowance to your allowance , but the online form asks" Does your spouse or civil partner have an annual income of between £10,601 and £42,385?" .


I am 60 years old in fulltime employment and my wife is 63 and receives the state pension , am I entitled to transfer some of my wifes allowance to mine ?

Impossible to say without knowing yours and her income.

Is your income between £10,601 and £42,385?

Is her income less than £10,600?

mynuts

my income is £36000 she is on state pension

p00hsticks

mynuts wrote: »

I am a bit confused about the transfer of allowances , money saving expert says that if your partner earns less than the £10,600 personal allowance you can transfer some of their tax allowance to your allowance , but the online form asks" Does your spouse or civil partner have an annual income of between £10,601 and £42,385?" .


I am 60 years old in fulltime employment and my wife is 63 and receives the state pension , am I entitled to transfer some of my wifes allowance to mine ?

The problem you are having is because it's not you that does the transfer - it's your wife who is gifting part of her allowance to you, so she's the one that needs to apply and so give her permission. Then you (she) would read the question on the online form as applying to your income, not hers.

mynuts

ok sorted , my mistake not reading the online form correctly .
thanks for your help

dori2o

mynuts wrote: »

my income is £36000 she is on state pension

Not everyone gets the same amount for State pension, some people get less than the basic, some get quite a lot more which can be in excess of £10600. Just saying she gets state pension means nothing in terms of the original question which was is her income below £10600?

You should be aware however that just because her income is below £10600 it doesn't mean that she won't have any tax to pay, and in fact the transfer of allowances could make her liable to pay some tax after the end of each tax year.

The reason for this is that she has no other PAYE income from which to collect any tax, and currently there is no system in place to collect tax directly from the state pension.

So, if her pension is below £10600 but above £9540 then by making the transfer she would end up owing tax at the tax year end.

For the new tax year the figures would be income below £11000 but above £9900.

In these cases HMRC will send out a tax calculation at the end of the tax year and your wife would have to send a cheque to pay off the tax due.

So, back to the original question, is your wife's income below £10600? Could you tell us what her income is? (The weekly/4 weekly figure will do)

Just to advise, your wife can also claim the allowance over the phone. All she needs is hers and your National Insurance number. You don't need to be present as there is no need to access you record to make the transfer, all rhw adviser dies is create a link between the 2 records and the transfer is done automatically. You normally receive the revised codes within 10 working days.