Calculating Tax on Savings interest if I have marriage allowance

Neversurrender

Tax interest on savings help required please

molerat

You have an income of £15532 which leaves you £3038 of untaxed interest, £12570 + £5000 - £15532 + £1000

You have £2962 income subject to tax of £592.40 with a rebate of £252 for receiving the marriage allowance plus any tax on excess interest above £3038.

Your tax coding, which is purely a method of trying to collect the correct tax, may be based on £13830 but your personal tax allowance, on which the savings bands are based on, is still only £12570.  Your wife though now has a personal allowance of only £11310.

Dazed_and_C0nfused

Neversurrender said:

Hello,

I was hoping someone can help me with this please. I have tried to find answers online, but getting brain fog.

I will soon be earning

£12,196 per anum State Pension

£3336.25 per anum Private Pension

Total £15,532.25 per annum

My wife has given me some of her tax allowance £1,260

So my Tax allowances are

£12,570 +£1260 = £13,830 per anum.

For the purposes of calculating how much I can earn per anum in savings interest, I'm a little confused.

From what I understand,

Do I, take my total earnings  income over £12,570 which would be £2,962.25 and take this off the £5000 +£1000 = £6,000 total tax allowance on savings, meaning I will now have a total tax allowance of £3,037.75 ? or do I also need to deduct that marriage allowance figure of £1,260 from my savings tax allowance meaning I would now have a total savings allowance of

£1,777.75 ?

In other words does my marriage allowance need to be taken off the tax allowance on savings or is it JUST the amount I earn over£12,570?

Hope I've asked that in a clear way, would be most grateful  for any help

Thanks

You cannot have a Personal Allowance greater than £12,570.

You need to calculate your liability ignoring Marriage Allowance.  Then deducted £252 off whatever your liability is.

NB.  Deducting £252 cannot make you have negative liability.