personal allowances , "starting rates" and marriage allowance

Dummy66

Hi, have OAP pension of £10595.52 (24/25), annuity £1119.oo Service pension £3766.52 gross (paid £325.40 tax on this)and was paid £275.00 gross (paid £55.oo tax on this) for an odd job.  My wife (Non tax payer) transferred marriage allowance to me £1260? .  Does the transfer of marriage allowance add on to my personal tax free allowance  i.e. with regard to the £5000 "starting rate" .   Confused here ?  also do i then need to do a self assessment as never done one ? Thank you for any help. Dont want to pay for an accountant if dont need to 

Dazed_and_C0nfused

Dummy66 said:

Hi, have OAP pension of £10595.52 (24/25), annuity £1119.oo Service pension £3766.52 gross (paid £325.40 tax on this)and was paid £275.00 gross (paid £55.oo tax on this) for an odd job.  My wife (Non tax payer) transferred marriage allowance to me £1260? .  Does the transfer of marriage allowance add on to my personal tax free allowance  i.e. with regard to the £5000 "starting rate" .   Confused here ?  also do i then need to do a self assessment as never done one ? Thank you for any help. Dont want to pay for an accountant if dont need to 

No, it makes no difference whatsoever to your Personal Allowance or any savings starter rate band available to you.

What it does mean is you get to deduct £252 (£1,260 x 20%) off whatever your tax liability is.

Why do you think you might need to file a tax return 🤔

Dummy66

Thank you for replying Dazed_and_COnfused.  I asked the questions because as well as above figures i received £2976.68 in interest in 24/25 . (Not ISAs) and was trying to work out any tax liability with the above figures and starting rate : i.e. personal allowance, plus  marriage allowance transfer plus  starting rate £5000.  Any help appreciated as to where i stand. ? 

Dazed_and_C0nfused

Your pension/earnings income totals £15,756.

Less your Personal Allowance leaves £3,186 to be taxed.  Assuming you aren't Scottish resident at 20%.

Your interest would then all be taxed,

£1,814 x 0% = £0.00 (savings starter rate)
£1,000 x 0% = £0.00 (savings nil rate)
£162 x 20% = £32.40 (savings basic rate)

Total tax liability is £669.60 less Marriage Allowance credit £252 = £417.60

You have already paid £380.40 so there is £37.20 left to pay.
 

Dummy66

Dazed_and_COnfused:  That is so kind of you to help me with this.  I appreciate that.  Just to finish off , as a result of that i.e. £32.70 to pay, do i therefore need to do a self assessment , otherwise am guessing HMRC will be on my case ?  or is there any easier way to pay this small amount ? .     Most helpful . 

Dazed_and_C0nfused

Dummy66 said:

Dazed_and_COnfused:  That is so kind of you to help me with this.  I appreciate that.  Just to finish off , as a result of that i.e. £32.70 to pay, do i therefore need to do a self assessment , otherwise am guessing HMRC will be on my case ?  or is there any easier way to pay this small amount ? .     Most helpful . 

Nothing you have posted suggests a Self Assessment return is necessary.

HMRC get interest details from banks and will write to people with additional tax to pay (for 2024-25) later this year.

It is possible they won't bother for £37.20 but I would expect to have to pay that (or have a reduced tax code for 2026-27 to pay it by extra tax deducted from your pension).

Albermarle

Why not put some of the savings in a cash ISA, or in your wife's name ?