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

GillyFlower

Thank you for feedback. He doesn't get P60's we are both retired - will look at last years 'bits' out of curiosity. I think it might only have been last year MPAllowance transferred - will check.

I do not want to take this post away from paulkamula and when I read this my first thought were maybe her income was already near the Personal Allowance so to transfer over to her husband meant her earnings then became taxable. Just a thought but not as clever as all of you.

Dazed_and_confused

If he doesn't get P60s what income does he have, just State Retirement Pension? Not sure what the tax would have been deducted from if he doesn't have a pension or annuity? Maybe some interest from a bank account?

PS. paulkamula's problem was likely to be applying for a tax year when it wasn't beneficial to do so, tax of £110 in one month half way through the year probably a one off with maybe £18 month tax to pay after the amount due since April was clawed back in one go.

GillyFlower

My husband receives state pension and a small private pension.

Anyway this has got me thinking on our minimal savings. I receive £7.130 in State Pension so I have made over to my husband the Married Persons Allowance of £1,060 = £8,190.

So with the Personal Allowance of £11,660 would I be correct in thinking I could still earn another £3,470 tax free?

It just occurred to me with the ISA's paying so little I could be putting it somewhere else i.e. savings account where interest has to be declared BUT I would need to earn the £3,470 of interest before paying tax. Haven't got enough savings to meet that threshold - so would I be correct in thinking I need to consider changing course for myself from ISA's to any savings account paying a better interest?

Thank you

Dazed_and_confused

Hubby should have received P60 for the private pension.

Think you're getting your figures mixed up. There is no personal allowance of £11660.

This years it is £11000 and if you have applied for marriage allowance then you would be left with £9900.

If your only income is State Retirement Pension of £7,130 and savings interest then you could actually have nearly £9000 in interest before you started to pay tax as you have your unused personal allowance, savings rate band (£5000 taxed at 0%) and personal savings allowance band (£1000 taxed at 0%).

polymaff

GillyFlower wrote: »

My husband receives state pension and a small private pension.

Anyway this has got me thinking on our minimal savings. I receive £7.130 in State Pension so I have made over to my husband the Married Persons Allowance of £1,060 = £8,190.

So with the Personal Allowance of £11,660 ...

If you've "made over" then your PA becomes 10% less, not more than the standard PA

50Twuncle

Personal Allowance is not £11,660 - it is £11,500 + marriage allowance of £1150 = total £12,650 !!

polymaff

50Twuncle wrote: »

Personal Allowance is not £11,660 - it is £11,500 + marriage allowance of £1150 = total £12,650 !!

GillyFlower is discussing 2015/16 - not 2017/18

teddysmum

GillyFlower wrote: »

My husband receives state pension and a small private pension.

Anyway this has got me thinking on our minimal savings. I receive £7.130 in State Pension so I have made over to my husband the Married Persons Allowance of £1,060 = £8,190.

So with the Personal Allowance of £11,660 would I be correct in thinking I could still earn another £3,470 tax free?

Thank you

The figures you quote are for the 2015 to 2016 tax year, but you assumptions are incorrect. You have added a donated tax allowance onto your income.


As you gave your husband £1060 of your allowance, his would be £10600+£1060=£11660, but your allowance is decreased by £1060, so yours is £10600-£1060=£9540.


An income of £7130 means you have £9540-£7130=£2410 to earn free of tax.


Now every basic taxpayer (including those paying no tax) can earn £1000 of savings interest without it being taxed free of tax and ,also you can have another £5000 of savings interest free of tax .

teddysmum

Dazed_and_confused wrote: »

If your only income is State Retirement Pension of £7,130 and savings interest then you could actually have nearly £9000 in interest before you started to pay tax as you have your unused personal allowance, savings rate band (£5000 taxed at 0%) and personal savings allowance band (£1000 taxed at 0%).

Several months ago someone posted about falling foul of the savings interest allowance an the marriage allowance.


She had an income well below her personal allowance but over £5000 of savings interest (before the new £1000 allowance ). She gave her husband the 10% allowed, but they (I think it was the husband) got a bill for the supposed tax saving (£212,at the time).



Various suggestions were put forward and I had to make an HMRC call so asked about her situation.


The explanation was that the system only allowed up to £5000 (I assume it's now £6000 ) of savings interest to be taken into account (ie you couldn't use interest over the £5000 to use the personal allowance still not benefitted from) , so she was not eligible to donate the 10% of her allowance, though she would still have no tax taken from her interest.

Claire_Steele

We applied for the marriage allowance transfer over a month ago. Straight away I received my new tax code for this year and next year and received my tax back for this year. I am still waiting for the allowance to be allocated to the year 2015/16. I am due all of my tax back for that year but when I contact HMRC they keep telling me that there is a technical fault for the allocation of that year (2015/16). Has anyone else encountered this? TIA