Marriage Allowance - When to apply?

Sea_Shell

I've just been reading about the Marriage Allowance, which currently we do not benefit from as neither of us are taxpayers.

However, once DH starts drawdown of his DC pension in tax year April 21-22, he would benefit from having the Allowance.

Two questions...

1) Even though he won't benefit from the allowance until Sept 21, can I apply for it in advance and have the allowance sitting there ready to be used. wef April 2021??

2) Once it's in place, can he then calculate his drawdown to reflect the new tax-free allowance and remain a non taxpayer this way? eg draw *£13750 pa (plus the 25% tax free portion of DC pension) - * subject to the allowance at the time.

I can't see any reason why the answers to these wouldn't be YES, but have I missed something?

Thanks

Dazed_and_confused

1). Yes, providing you are both still eligible i.e. not classified as a higher rate payer, if you apply for the current tax year it should just roll forward and continue in each subsequent tax year. Although it may be simplest to just apply when you get to the start of the 2021:22 tax year.

2). His tax free allowance doesn't actually change. Marriage Allowance entitles him to a tax deduction of his overall tax liability. Currently worth £250 (£1,250 x 20%). However HMRC do include it as a tax code allowance to ensure people can get the benefit during the year. For most people there is no difference but ultimately he will be liable to tax on any income above his own Personal Allowance and then gets the Marriage Allowance tax credit knocked off his liability.

David_Morgan

If and when you do claim the Marriage Allowance follow it through the HMRC guide DO NOT get drawn away by any other method of claiming your refund back you will get stung, I unintentionally did and lost nearly half of my £541.00 refund, when challenged this company said it was fees. There really should be a ban on this type of practice, it needs Martin on this issue:money::money:

Dazed_and_confused

The strange thing about this is that anyone who applies for Marriage Allowance can only ever pay the same amount of tax or more.

You can never pay less tax.

So your spouse presuambly applied.

What and why did you, as the recipient, sign up for?

sheramber

From an earlier post the form used by the third party includes that t he refund applicant authorises any refund to the other party is paid to them. The recipient of the refund doesn't need to sign anything.