Marriage Allowance NT tax code

Jersey

I recently worked for a British company in Saudi Arabia for 2 years. My tax code for that salary was NT.
I also have a small UK income in the form of a pension.

The year I went to Saudi and the year I returned were split years.

My wife applied to have some of her tax allowance transferred to me but HMRC say I am not entitled because even though my Saudi salary had the tax code of NT and as such I was only a basic rate tax payer for my UK income, if my Saudi salary had been taxable, then it would have put me over the threshold and into the 40% bracket.

Is it correct that HMRC take in to account a non taxable salary, therefore (in theory) putting me into the higher tax bracket to decide my entitlement to marriage allowance?

Dazed_and_confused

Doesn't sound right.

From the tax rate perspective entitlement to Marriage Allowance is based on whether you are deemed to be a higher rate payer.

There is an odd situation involving dividend income being taxed at the dividend nil rate but within the higher rate tax band which means you don't pay any higher rate tax but are classed as a higher rate payer but if that doesn't come into play and you are only liable at basic rate then I don't think you would be ineligible for the reason given.

I also have a small UK income in the form of a pension.

Was the small pension more than your standard Personal Allowance?

Jersey

No it wasn't.

2015-2016 I was basic rate 20%
I went to Saudi Sept 2016 and so 2016-2017 was a split year and I was still a basic rate tax payer prior to going abroad.
2017-2018 my uk income alone was less than my personal tax allowance.
2018-2019 was a split year as I returned from Saudi sept 2018 and I was a basic rate tax payer.

Dazed_and_confused

Maybe time to ask HMRC for a second opinion?

By their logic you should be getting a very large tax bill.

If the income paid under the NT tax code is taxable then you will owe a lot (as no tax was deducted at the time)

If it isn't then I don't see what is stopping you getting the Marriage Allowance tax credit (you don't get any extra Personal Allowance, it's a fixed amount deducted from your tax liability).

Jersey

I might call HMRC again.

It does seem strange to me that they applied NT code to my salary, which is correct and the same as all the other expat employees within the company, however they take the salary in to account, theoretically putting me in to a higher tax bracket, when deciding my eligibility to marriage allowance.