Marriage allowance taxable income

Havent_got_a_clue

Dazed_and_C0nfused said:

If he didn't have any spare Personal Allowance then the interest (when small enough) would be taxed at the savings starter rate of 0% 😊.  And wouldn't be shown in his tax code.

Ah yes, I remember you replied to another post to say that personal allowance is used first!

It really is a minefield! 

We have put the application in - for this year as well - Then remembered that his earnings will be uplifted by approx £800 lump sum this year. This will take him just over £12000 so will doubtless mean paying some tax 🙈🙄

He does pay into a SIPP- how would we show this to increase his tax band to avoid any tax? He doesn’t do a self assessment? 

Havent_got_a_clue

sheramber said:

Havent_got_a_clue said:

Thank you so much for the explanation and the link. Makes more sense- much appreciated.
I don’t understand a thing about dividends though  as the only stocks and shares we have are uncrystallised within funds in pensions. Could we be impacted unknowingly? 

Something else to add to my bedtime reading list.

As a little aside, would you happen to understand why my husbands tax code was 1237l last year? He does not have any BIK.

Does he have a notice of coding for last year/ That would show how the tax code was arrived at.

We can’t remember seeing a notification but we have checked his tax account on line and it’s definitely to do with the interest. 

Thank you 😊 

Dazed_and_C0nfused

Havent_got_a_clue said:

Dazed_and_C0nfused said:

If he didn't have any spare Personal Allowance then the interest (when small enough) would be taxed at the savings starter rate of 0% 😊.  And wouldn't be shown in his tax code.

Ah yes, I remember you replied to another post to say that personal allowance is used first!

It really is a minefield! 

We have put the application in - for this year as well - Then remembered that his earnings will be uplifted by approx £800 lump sum this year. This will take him just over £12000 so will doubtless mean paying some tax 🙈🙄

He does pay into a SIPP- how would we show this to increase his tax band to avoid any tax? He doesn’t do a self assessment? 

Relief at source pension contributions do increase the basic rate band (by the amount of the gross contribution).

But I'm at a loss to how this benefits him from his personal income tax position?

Do you mean would reduce taxable income?  If so then no, they don't have that effect.

Irresepctive of that aren't you better off, as a couple, if he pays basic rate tax on say £800 and you get a tax reduction of £252?

Havent_got_a_clue

Ok thank you-yes I misunderstood. 

Yes we will definitely be better off and of course I’m grateful for that. I was looking at it as though we might end up paying unnecessary tax this year as I could well be within the 20% bracket. Hadn’t thought it through properly.
thank you so much for your help- its been invaluable 😊