Marriage Allowance

Biggus_Dickus

Dazed_and_confused wrote: »

Assuming you have disclosed all of her taxable income she is eligible to apply for it and will lose £1,190 (but usually 10%) of her Personal Allowance as a result.

So in the current tax year her tax position would be,

Total income £15,000
Less reduced PA £10,660
Income liable to tax £4,340
£4,340 x 0% (savings starter rate of tax) = £0.00

She has a bit of spare savings starter rate available and hasn't even got to the point of being able to use the savings nil rate of tax (aka the Personal Savings Allowance).

You however would get a higher tax code not a lower one. Unless it starts with a K the higher the tax code the less tax is paid. Receiving Marriage Allowance will entitle you to have £238 credit knocked off your tax bill in the current tax year.

It doesn't it entitle you to an extra £1,190 in Personal Allowances (although that is broadly how HMRC show it in your tax to make sure you get the benefit during the tax year and don't have to wait until the end of the year).

It does include ALL my wife’s taxable income. She has a chunk of cash ISA’s but the interest from those is not included in the £7k.

And of course,...my post should have said ‘increase’ rather than ‘decrease’ my tax code. :doh:

Notwithstanding the tax situation with regard to the savings interest we weren’t sure whether HMRC would simply add her PAYE salary (£8k) and her savings interest (£7k) together and decree the Marriage allowance not applicable because the total is above her personal tax allowance of £11850.

Many thanks for the comprehensive reply.

polymaff

Biggus_Dickus wrote: »

decree the Marriage allowance not applicable because the total is above her personal tax allowance of £11850.

Which you now know to be bogus - even if you've read it in gov.uk.

Biggus_Dickus

polymaff wrote: »

Which you now know to be bogus - even if you've read it in gov.uk.

Indeed!:D :T

Dazed_and_confused

Notwithstanding the tax situation with regard to the savings interest we weren’t sure whether HMRC would simply add her PAYE salary (£8k) and her savings interest (£7k) together and decree the Marriage allowance not applicable because the total is above her personal tax allowance of £11850.

No, there is no such rule. She could have a (taxable) PAYE salary of £30k and savings interest of £7k and HMRC would have to allow her to successfully apply as she would still be eligible to do so.

It would be completely pointless as you (as a couple) wouldn't benefit overall but she could apply and her application would have to be accepted.

polymaff

Not necessarily. If she was forced into paying tax on dividend income as a result of electing for MAT and he got the 20%-equivalent of the same amount it's trebles-all-round.

Dazed_and_confused

Well true but the op made it clear that his wife only has PAYE income and savings interest

polymaff

oh, quite, but as you opened the door re:hypothesising alternative wifely circumstances, I couldn't resist a(nother) poke at the ultra-incompetence of HMRC.


They can't even do the wrong thing right.

userXYZ

My earning is just a bit over the basic rate band. However, I have a salary sacrifice pension. Can I use this pension deduction to bring the income back to the base rate band and be qualified for the marriage allowance application?

molerat

userXYZ wrote: »

My earning is just a bit over the basic rate band. However, I have a salary sacrifice pension. Can I use this pension deduction to bring the income back to the base rate band and be qualified for the marriage allowance application?

Yes, the criteria is not paying tax at the higher rate.

Nediachick

I’ve just submitted the government form to transfer my allowance to my husband (as the article suggested), and ticked the boxes to backdate any rebates due.

Have just had an email from HMRC to say that his tax bill this year (2018/2019) has been adjusted, and he will also get a rebate of £345.

I’m not being greedy, but I thought it would be more than that as, looking at how much could be claimed, it was well over £200 for each year, so thought it would be over £600?

Am I missing something?