Tax on Savings and the effect of marriage allowance transfer

homerhotspur

I am trying to establish what I think I kniow to be correct but cannot find it anywhere i.e that a transfer of marriage allowance does not have the effect of increasing the 5,000 starting rate . eg a person has income of 17,570 less 12,570 pa = 5,000 starting rate all used up and only the £1k savings allowance available to offset. Same person has income of 17,570 less 13,830 ( PA plus MA) =3670, so 1330 starting rate band still available +£1k savings allowance = £2330 available to offset.  As stated I believe the second scenario is not allowed even though , logically, it seems it should be somehow?

thanks

Dazed_and_C0nfused

homerhotspur said:

I am trying to establish what I think I kniow to be correct but cannot find it anywhere i.e that a transfer of marriage allowance does not have the effect of increasing the 5,000 starting rate . eg a person has income of 17,570 less 12,570 pa = 5,000 starting rate all used up and only the £1k savings allowance available to offset. Same person has income of 17,570 less 13,830 ( PA plus MA) =3670, so 1330 starting rate band still available +£1k savings allowance = £2330 available to offset.  As stated I believe the second scenario is not allowed even though , logically, it seems it should be somehow?

thanks

Someone is starting from an incorrect assumption.

Marriage Allowance is a tax reducer (up to £252 saving in the current tax year), it doesn't give you any extra allowances.

Someone with non savings non dividend income of £17,570 wouldn't usually have any savings starter rate band at all.

homerhotspur

OK thanks for clarifying the main point. My example wasn't perhaps the best as I should have shown someone with income of ,say, 14,500 but the issue is still the same.

Dazed_and_C0nfused

homerhotspur said:

OK thanks for clarifying the main point. My example wasn't perhaps the best as I should have shown someone with income of ,say, 14,500 but the issue is still the same.

Someone with non savings non dividend income who hasn't applied for Marriage Allowance would have £3,070 of the savings starter rate band available to use.

Plus the £1,000 savings nil rate band.

Assuming that their savings and dividend income doesn't take them into the higher rate bracket.