STATE PENSION TAXED AND HOUSING BENEFIT

ROG

Likely to affect perhaps tens of thousands in the near future

Isthisforreal99

ROG said:

Likely to affect perhaps tens of thousands in the near future

Hopefully they won't pester HMRC with pointless phone calls. It's hard enough getting through.

Back in the day it was 'we don't deal with hypothetical questions'

sheramber

ROG said:

sheramber said:

ROG said:

On-the-coast said:

So why not cancel the “spouse transfer thing” immediately?

Cannot be cancelled until the start of a new tax year - HMRC rules
Also if I could do that then we would lose out jointly on tax free income

How much HB are you losing compared to the tax advantage your spouse gets?

Not the general issue here as thousands could be thrown into this situation if/when the state pension is more than the tax allowance and there are not any other taxable incomes

The bottom line is you can’t get both  paying less tax  by transferring marriage allowance and getting more HB because you have  tax deducted from  your pension. 

At present the  state pension is not over the tax allowance  and that situation may be resolved by the time it is. 

ROG

Dont get the tax transfer bit because HB is based on joint nett income so whether one pays tax or the other does then how does that matter?

NedS

ROG said:

Dont get the tax transfer bit because HB is based on joint nett income so whether one pays tax or the other does then how does that matter?

Joint net earned income. That is the 'bit' you are not getting. Presumably you have no earned income, as you are being taxed on your SP which is used GROSS for HB purposes.

sheramber

ROG said:

Dont get the tax transfer bit because HB is based on joint nett income so whether one pays tax or the other does then how does that matter?

joint earned income plus gross joint unearned income

net wages, gross state pension and gross savings. over £6000