age allowance and married couple’s allowance

Snowdrop1

Hello, I am asking this on behalf of my dad. My parents both receive age allowance and married couple’s allowance (they are both 85). Their tax code keeps going up and down and he does not understand why. He has written to the Inland Revenue and tried phoning but no joy. There income is £15k per year from pension and savings, yet he is being taxed of this. What should his tax code be? Do they just get a joint tax code between them or are they just using his half of the tax allowance? Many thanks.

agrinnall

You'll need to give some actual figures for us to work out what's going on - income breakdown for both parents and their latest tax codes for each part of that income.

booksurr

it is of course made complex!

given his age he is entitled to the higher personal allowance of 10,660 as the start point

also due to his age (and the assumption he married before 2005!) he is entitled to the married couples allowance, but this is not an additional figure. It works as a tax "reducer" ie at his age he gets the full amount of £835.50 deducted from any income tax he has to pay based on his personal allowance:

as an example:
gross income: 15,000
PA 10,600
taxable income 4,340
tax thereon @ 20% = £868
less tax reducer £835.50
net tax payable: £32.50

because he has claimed the (age related) married couples allowance he cannot also claim the transfer of the spouse's PA so yes as a couple they are indeed being taxed on only "one" (married) tax allowance because all the income is in his name

jem16

booksurr wrote: »

because he has claimed the (age related) married couples allowance he cannot also claim the transfer of the spouse's PA so yes as a couple they are indeed being taxed on only "one" (married) tax allowance because all the income is in his name

His wife still has a full PA and we don't yet know how much of that income is in her name.

The Married Couples' Allowance is more generous for them than transferring part of the spouse's PA surely?

xylophone

There income is £15k per year from pension and savings,

Does the OP mean that their joint income is £15,000 per annum?

He mentions income from pensions and savings - on income that low, should there be any tax on savings?

If the income is joint and assuming that the wife is receiving only a Cat B state pension, should the husband be paying any tax at all?

Snowdrop1

Hello

I spoke to my dad last night, the income of £15,000 is just in his name and my mums income is just her state pension. So am I right in thinking if his tax code is 1066 then that is correct and he is paying the correct tax? Many thanks

agrinnall

1066L suggests that your dad is getting the age allowance but not the married couples allowance. Try entering the details here.

https://www.gov.uk/calculate-married-couples-allowance

jem16

Snowdrop1 wrote: »

I spoke to my dad last night, the income of £15,000 is just in his name and my mums income is just her state pension. So am I right in thinking if his tax code is 1066 then that is correct and he is paying the correct tax? Many thanks

Still need much more information to be able to answer your question.

How much is his pension and how much is savings interest?

Is the pension income all state pension or does he also have a private pension?

How much is his state pension as this will reduce his tax code and the Married Couples' Allowance will increase it. He should have a P2 Coding Notice that explains how his tax code is calculated - what does it say?