NSP, Marriage Allowance & Tax.

xrg4

Edit..

I mean 25/26 is the part year and 26/27 will be the first full year

molerat

xrg4 said:

Thankyou

She will be eligible from 23rd July, hence my assumption the first payment will be in August.

Her projection is about £8 a week short of the full pension (so about £400 pa) but it will make her approx £5k above her annual tax threshold.

Can I ask what you mean by state pension is taxable when due and not when paid?

Mine is paid without tax and my tax burden is satisfied from other, private pensions, hence my question.

So you need to add those 36 weeks of SP (at 25-26 rate, +4.0913% on 24-25) to her 25-26 annual NHS pension, deduct her £11310 allowance and multiply that by 20%.  If that comes to more than £252 you are receiving no benefit from the MA apart from the delay in her paying, your choice then if you want to cancel.

Have you not considered / checked about filling gaps to increase her state pension ?  Even if taxed at 20% the capital outlay will be repaid in just over 3 years.

xrg4

Yes, she needs one more year to get the full rate, albeit, weirdly, the maximum she can get is about a £1 a week less than the max.

23/24 is the year she can buy and break even is just over 2 years.

That is how this started - looking to get maximum value while getting the best joint tax scenario too

xrg4

molerat said:

xrg4 said:

Thankyou

She will be eligible from 23rd July, hence my assumption the first payment will be in August.

Her projection is about £8 a week short of the full pension (so about £400 pa) but it will make her approx £5k above her annual tax threshold.

Can I ask what you mean by state pension is taxable when due and not when paid?

Mine is paid without tax and my tax burden is satisfied from other, private pensions, hence my question.

So you need to add those 36 weeks of SP (at 25-26 rate, +4.0913% on 24-25) to her 25-26 annual NHS pension, deduct her £11310 allowance and multiply that by 20%.  If that comes to more than £252 you are receiving no benefit from the MA apart from the delay in her paying, your choice then if you want to cancel.

Have you not considered / checked about filling gaps to increase her state pension ?  Even if taxed at 20% the capital outlay will be repaid in just over 3 years.

Her tax burden from from August 25 to March 26 will be more than £252 so cancelling the MA would make sense.

I have not checked yet but if I set up cancellation before April 5th, can I set it up to take effect from August or can it only be done to take effect from April?

Dazed_and_C0nfused

xrg4 said:

molerat said:

xrg4 said:

Thankyou

She will be eligible from 23rd July, hence my assumption the first payment will be in August.

Her projection is about £8 a week short of the full pension (so about £400 pa) but it will make her approx £5k above her annual tax threshold.

Can I ask what you mean by state pension is taxable when due and not when paid?

Mine is paid without tax and my tax burden is satisfied from other, private pensions, hence my question.

So you need to add those 36 weeks of SP (at 25-26 rate, +4.0913% on 24-25) to her 25-26 annual NHS pension, deduct her £11310 allowance and multiply that by 20%.  If that comes to more than £252 you are receiving no benefit from the MA apart from the delay in her paying, your choice then if you want to cancel.

Have you not considered / checked about filling gaps to increase her state pension ?  Even if taxed at 20% the capital outlay will be repaid in just over 3 years.

Her tax burden from from August 25 to March 26 will be more than £252 so cancelling the MA would make sense.

I have not checked yet but if I set up cancellation before April 5th, can I set it up to take effect from August or can it only be done to take effect from April?

Nope, I think she needs to do it and it will be effective from the next 6 April.

So if she leaves it too long it will remain in place until 6 April 2026.  The fact that would mean she paid more tax would strictly be necessary isn't a factor as she is still "eligible" i.e. not a higher rate payer.

xrg4

Thankyou for that