Marriage Allowance

malc_b

Hi,

Although this might be a question for cutting tax is it very pension specific so I think it sits better in this forum.

My wife currently transfers her tax Marriage Allowance to me.  We are both pensioners.  She gets the full new state pension.  I get the full new state pensions, plus a small SERPs addition and plus a small private pension.  With the expected rise of 7.8% in state pension that would make her income ~£11,470 by my reckoning so more that the £11,310 allowance left when you subtract the MA.  Without the MA my taxable income will be over in 2024, in fact likely over either way but depends on the rises.

Is there any way to share the MA or opt for a partial transfer?  Or any other work around?  Or do we just have to work out which option (transfer or not) gives us the lowest tax as a couple and accept that as a couple we lose some tax free allowance?

I realise of course I am over either way then I should keep the MA as I would get the full use of it whereas she would only use part of it.  It was more it we fell in-between.

Thanks

molerat

It is all or nothing.  We have been in the both paying tax but overall benefitting situation for a few years now.

Dazed_and_C0nfused

Your wife would be perfectly justified in ending Marriage Allowance, particularly if the correct earnings increase of 8.5% was applied so her State Pension was actually £11502.

Maybe the onus is on you to agree to pay her liability 😀

Silvertabby

My understanding is that 8.5% includes the one-off bonuses awarded to NHS staff etc, and that the actual salary increase figure is more like 7.5%.

I do hope that some pensioners won't kick off because they won't get a cut of the bonuses paid to the likes of nurses.....but I'm not going to hold my breath.  Remember the mega whinges because the 2022 pensions increase was adjusted to exclude the reversal of the Covid 80% salary payments back up to their original 100%?  Yes, I'm a pensioner.

pinnks

That is correct but historically the increase in average earnings has been that including bonuses as it comes out lower than the without bonuses figure.  The government is getting a bit "cake and eat it" when it comes to the annual increase in the state pension. e.g. the 2022 increase required primary legislation to override the provision that requires the state pension to increase by not less than the increase in average earnings.  What a mess!

xylophone

The government is getting a bit "cake and eat it" when it comes to the annual increase in the state pension. 

More like "Pick and Mix"? 

pinnks

Yes, much better way of describing it...