Marriage Allowance & Tax on savings interest

ljayljay

I have two separate but related questions on Marriage Allowance & Tax on savings interest.

Current scenario, partner income below £12,570, my income as BR taxpayer above & receiving the additional £1,260 Marriage Allowance.

Post April 23, partner income will exceed £12,570. Can the Marriage Allowance continue even though there wouldn’t appear to be any tax advantage?

If not does my partner need to do anything or will HMRC eventually cancel & amend both of our tax codes automatically at some stage in the future?

Now my additional query relates to how tax on savings interest is calculated. Can the Marriage Allowance affect the tax due on savings interest. I understand that a BR taxpayer would normally have no tax to pay on the first £18,570 (i.e., £12,570 + £5,000 + £1,000) Can the additional £1,260 Marriage Allowance be added to increase income to £19,830 before tax is payable on savings interest or is the Marriage Allowance ignored in this calculation?

I have had a search on HMRC & elsewhere but am unable to find any specific guidance on these scenarios.

Just trying to clarify the above before deciding what to do with both savings & tax allowances for the 23/24 TY.

Dazed_and_C0nfused

For the recipient Marriage Allowance is a tax reduction, not an increase in allowances so it wouldn't increase the amount of income which wouldn't be taxed above 0%.

But it would knock £252 off the actual liability.

If neither of you are liable to higher rate tax then you would both still be eligible for Marriage Allowance.

Jeremy535897

The marriage allowance transfer can continue unless and until you become a higher rate taxpayer, but if your partner could fully use their personal allowance there will be no advantage in keeping it. For cancelling it see:
https://www.gov.uk/marriage-allowance/if-your-circumstances-change

If your partner cancels it by 5 April 2023 the cancellation will take effect from 6 April 2023. Don't leave it that late though.

How the starting rate for savings works is more complicated than you think. It is explained here:
https://www.gov.uk/apply-tax-free-interest-on-savings

Marriage allowance is irrelevant to how much you can get.

ljayljay

Dazed_and_C0nfused said:

For the recipient Marriage Allowance is a tax reduction, not an increase in allowances so it wouldn't increase the amount of income which wouldn't be taxed above 0%.

Jeremy535897 said:

Marriage allowance is irrelevant to how much you can get.

OK think this was the main bit that got me confused. With this in mind I will get my wife to cancel the transfer from 23/24. With the PTA frozen for a number of years my wife can join me as a taxpayer & maximise her income instead....all good.