Marriage Allowance

Brighton_belle

Thanks Molerat. I understand better now.

Dazed_and_confused

And if your £10,800 included any savings interest or dividend income then it could be more than £40 as that income would be taxed (in 2016:17 or 2017:18) at 0%.

Brighton_belle

Thanks dazed and confused. It's all making abit more sense now.

Dazed_and_confused

One thing to remember in your situation is that you will get a bill for £180 and your spouse will get (assuming they paid enough tax and they paid the correct amount) about £220 tax refund.

So you need really trust your spouse financially cause if they bank the refund and spend it on themselves then you're £180 worse off

kezzygirl

molerat wrote: »

Which one of you cancelled it ?https://www.gov.uk/marriage-allowance/if-your-circumstances-change

So if he cancelled it then he will get a bill for all received since first starting, if you cancelled it will run to the end of this FY and he will have to pay back this year's if he is now a higher tax payer.

My husband transferred some of his allowance to me, as I am the higher earner. He has cancelled it online as his income has now increased to the level where it is pointless transferring to me. I continue to be the higher earner between us. It states that he will stop transferring the allowance to me at end of april 2018- will we have to pay any of the allowance back?

Consumerist

kezzygirl wrote: »

My husband transferred some of his allowance to me, as I am the higher earner. He has cancelled it online as his income has now increased to the level where it is pointless transferring to me. I continue to be the higher earner between us. It states that he will stop transferring the allowance to me at end of april 2018- will we have to pay any of the allowance back?

Your husband will just continue to pay the additional tax through his PAYE until the end of the tax year (5th April, not end of April) and you will continue to pay less tax through your PAYE. There should be no other tax adjustments needed.

shicky

Sorry for the basic question on this, my wife is unemployed due to illness and I earn over the limit mention. That said, I put a LOT of money into my pension as obviously with my wife not working, the future is a concern. I assume my pension payments and student loan payments are not considered? If they were, I don't get anywhere near the higher tax bracket?

I'm assuming we're ineligible but thought it worthwhile to double check

Dazed_and_confused

Student loan isn't relevant but pension usually is.

What type of pension are you talking about? Company scheme where pension is deducted before tax is calculated, personal pension/SIPP or something else?

Your wife needs to be careful about which year(s) she applies for if you could benefit. Just because she is unemployed today doesn't necessarily mean she should apply right back to year 1. It is her taxable income in each tax year that is important not her current situation.

shicky

Dazed_and_confused wrote: »

Student loan isn't relevant but pension usually is.

What type of pension are you talking about? Company scheme where pension is deducted before tax is calculated, personal pension/SIPP or something else?

Your wife needs to be careful about which year(s) she applies for if you could benefit. Just because she is unemployed today doesn't necessarily mean she should apply right back to year 1. It is her taxable income in each tax year that is important not her current situation.

The pension does matter? Interesting! This is a company scheme where amounts are deducted before tax. I'm a bit surprised given I could just change my percentage down from 25% and then end up ineligible with my wife for the marriage allowance.

Thank you for making the point on tax years, I'm usually decent at these things but much better to have someone who has been through it before point out the common pitfalls.

Dazed_and_confused

This is a company scheme where amounts are deducted before tax

So you cannot deduct them, simply because they are already deducted in working out your taxable salary, for example

Annual Salary £45,000
10% pension contribution £4,500
Taxable salary £40,500

It is the £40,500 which matters and that will be on your P60, you cannot deduct the contribution again.