Marriage Allowance

unholyangel

AnotherJoe wrote: »

Note also the fact that some reviews talk of a deed of referral which is valid for five years and outrageous if true. I wonder if someone could take them to small claims for fraud?

Its a letter/deed of assignment - where you assign your right to claim a repayment to the person/company named on the assignment.

You can't assign a right to claim for future years because you can only assign what you yourself have and you won't have that right until that tax year occurs.

You can however assign the right to claim for all allowable years - which would be the current tax year minus 4 years (aka 5 years). That will be the 5 years they're referring to.

Assignments can be general or specific - general as in to claim for all repayments due regardless of cause or specific as in for marriage allowance, uniform allowance etc. They can be for a single tax year or multiple.

Ninnut85

Has anyone who has requested their MA for 2018/2019 received their payment yet? I know HMRC are going through all the 2018/2019 tax forms now but just wondered if anyone had received theirs yet?

pdbaker

So this seems like rather a technical point but in the tax year 18/19 I earned slightly more than the 20% threshold but I didn't pay/owe any higher rate tax because the total of my personal pension contributions and charitable giving increased my threshold so all my tax was at 20%.

So to my simple mind I'm not a higher rate taxpayer for tax year 18/19 so might be eligible for my wife to transfer some of her free personal allowance.

I phoned the HMRC guidance help-line and was informed it is your gross income which is considered in deciding if you are a higher rate taxpayer or not and doesn't depend on whether you actually pay higher rate tax. So unlucky for us: just posting this for anyone else who might have been pondering the same query (or unless any tax expert thinks I've been mis-informed!).

Dazed_and_confused

You have been misinformed.

The tax legislation means you are eligible providing you are not a higher rate payer or would be a higher rate payer if it weren't for the dividend nil rate of tax (often referred to as the Dividend Allowance but actually a 0% tax rate).

The same rules apply to both the Marriage Allowance transferor and the recipient.

So unless you have dividend income you should be ok. If you have dividend income then it depends on whether this is taxed (at 0%) within the basic or higher rate tax band.

Do HMRC already know about your pension contributions and gift aid payments?

Dazed_and_confused

for my wife to transfer some of her free personal allowance

It might be just the way you have worded this but "some" is very specific.

If eligible i.e. not deemed a higher rate payer, the transferor (your wife) gets a reduced Personal Allowance, £10,660 in 2018:19, losing £1,190 of her Personal Allowance. This might not affect her but it make her liable to tax, deducting the overall benefit to you as a couple.

In return you get a fixed amount (£238) deducted from your 2018:19 tax liability.

Stewartf23

We applied for marriage tax and promptly received a cheque through the post. My wife received a letter a few days later saying that she owed nearly the same amount in tax. Has this happened to anyone else? She is now being chased for the money which we had already spent!

p00hsticks

Stewartf23 wrote: »

We applied for marriage tax and promptly received a cheque through the post. My wife received a letter a few days later saying that she owed nearly the same amount in tax. Has this happened to anyone else? She is now being chased for the money which we had already spent!

It'll happen to any couple where the lower earning partner has income that is only slightly below the standard personal allowance (currently £12,500). By transferring 10% of their allowance to their spouse, they then become liable to tax themselves on their earnings over the reduced amount

Marriage allowance isn't the government giving money away - it;s transferring tax from one part of the couple to the other, and it's only beneficial if one partner has sufficent spare tax allowance that is currently not being made use of

pdbaker

Thanks very much for this: interesting. Yes I did specifically tell the HMRC advisor in the telephone conversation about the fact that I knew I would be a higher rate taxpayer based on gross income alone but that I wasn't one because of my SIPP contribution and my gift aid charitable donation. He said that was ignored: it was only the gross income figure that was used in deciding marriage allowance eligibility. I then asked him if we definitely sure about that because it seemed a big vague in the definition and he said he was. I do have some small dividend income as well but that is well within the annual 0% limit and even if added on to my income total I would still be within my extended higher rate level so I can see from my tax return that I am definitely still only paying 20% tax on everything no tax is due on the dividends. I find it all very confusing but perhaps I should make a fresh contact to HMRC and pass on your quote definition below do you think?

Thanks again,

Paul

Dazed_and_confused wrote: »

You have been misinformed.

The tax legislation means you are eligible providing you are not a higher rate payer or would be a higher rate payer if it weren't for the dividend nil rate of tax (often referred to as the Dividend Allowance but actually a 0% tax rate).

The same rules apply to both the Marriage Allowance transferor and the recipient.

So unless you have dividend income you should be ok. If you have dividend income then it depends on whether this is taxed (at 0%) within the basic or higher rate tax band.

Do HMRC already know about your pension contributions and gift aid payments?

Dazed_and_confused

Yes I did specifically tell the HMRC advisor in the telephone conversation about the fact that I knew I would be a higher rate taxpayer based on gross income alone but that I wasn't one because of my SIPP contribution and my gift aid charitable donation. He said that was ignored: it was only the gross income figure that was used in deciding marriage allowance eligibility.

He was wrong. But I fear you are getting confused with the dividend income. Even if you are only charged the dividend nil rate (aka Dividend Allowance) this can still prevent you receiving the Marriage Allowance tax credit.

If any part of the dividend nil rate falls within the higher rate band you miss out.

So can you confirm your total taxable income figure and the gross amount of relief at source pension contributions and gross amount of gift aid payments?

And when I said have told HMRC I meant are they taking them into account in your tax calculation, not just have you mentioned them in a phone call.

In fact have you actually received a calculation without the Marriage Allowance credit yet?

polymaff

The simplest approach to MAT eligibility and dividend income is to imagine that the dividend allowance doesn't exist.


From the horse's mouth:


... " transferable allowance: conditions for entitlement to tax reduction " ...


“ITA 2007 s55B(b)(ba)if for the tax year the individual is liable to tax at the dividend nil rate, the individual would for that year neither be liable to tax at the dividend upper rate, nor be liable to tax at the dividend additional rate, if section 13A (dividend nil rate) were omitted,”.