Have I misunderstood the 'marriage tax allowance'?

UnsureAboutthis

As above

When I was completing our online tax returns last night, I looked into the above.

My question. In England, for most people the annual personal tax allowance
atm is 12570. Therefore I assumed, when married, both people would get 12570 x 2 =
25140.

If the above scdnario was applied and one of the couple gave 10% of their allowance to their
other half, would this mean the person with the married allowance would have a tax-free
allwance of 13570 and the other 11570 - or as I
am reading it - one will have 12570 and the other 11570 - therefore = 25140?


I can see the benefits for married people/couple where one earing less than the allwance tranfers to the other but calling it the "married mans allowance" as it was known when we got married, is not really an additional amount but a way to slightly reduce tax -  am I correct?

Therefore, the benefit of marriage is - saving about 200 in tax a year

Mark_d

https://www.gov.uk/marriage-allowance

eskbanker

UnsureAboutthis said:

My question. In England, for most people the annual personal tax allowance
atm is 12570. Therefore I assumed, when married, both people would get 12570 x 2 =
25140.

If the above scdnario was applied and one of the couple gave 10% of their allowance to their
other half, would this mean the person with the married allowance would have a tax-free
allwance of 13570 and the other 11570 - or as I
am reading it - one will have 12570 and the other 11570 - therefore = 25140?


I can see the benefits for married people/couple where one earing less than the allwance tranfers to the other but calling it the "married mans allowance" as it was known when we got married, is not really an additional amount but a way to slightly reduce tax -  am I correct?

Therefore, the benefit of marriage is - saving about 200 in tax a year

The donor has their personal allowance reduced to £11,310, and the £1,260 is transferred as a credit against the tax liability of the recipient, thereby saving £252 per year in total if the donor earns less than £11,310 and the recipient earns more than £13,830 of taxable income.

Dazed_and_C0nfused

UnsureAboutthis said:

As above

When I was completing our online tax returns last night, I looked into the above.

My question. In England, for most people the annual personal tax allowance
atm is 12570. Therefore I assumed, when married, both people would get 12570 x 2 =
25140.

If the above scdnario was applied and one of the couple gave 10% of their allowance to their
other half, would this mean the person with the married allowance would have a tax-free
allwance of 13570 and the other 11570 - or as I
am reading it - one will have 12570 and the other 11570 - therefore = 25140?


I can see the benefits for married people/couple where one earing less than the allwance tranfers to the other but calling it the "married mans allowance" as it was known when we got married, is not really an additional amount but a way to slightly reduce tax -  am I correct?

Therefore, the benefit of marriage is - saving about 200 in tax a year

Marriage Allowance means the applicant has a reduced Personal Allowance (£11,310).

And the recipient has the same Personal Allowance (£12,570) but gets a tax reduction worth up to £252.

LITRG has a good explanation here, looks for mechanics.

https://www.litrg.org.uk/tax-nic/income-tax/tax-allowances/marriage-allowance-transferable-tax-allowance

sheramber

Married couples alliowance is a different allowance which is available to  couples where one spouse was born. For 6 April 1935.

UnsureAboutthis

OK, thanks to all. I found the link posted by Dazed easy to understand. Now, I'm not confused.

MACKEM99

My marriage tax allowance is currently transferred to spouse but want to cancel it meaning my allowance should go back to standard wef 6 Apr 26.

I have gone onto the Gateway but can only find this:

Why do you need to stop your Marriage Allowance?

Do not need Marriage Allowance any more

Divorce, end of civil partnership or legally separated

Bereavement

None of above want it back from spouse.

Cancelling Marriage Allowance

"We will cancel your Marriage Allowance, but it will remain in place until 5 April 2026, the end of the current tax year.

Your Personal Allowance will not include any Marriage Allowance from 6 April 2026, the start of the new tax year.2"

This sounds like I will gain no benefit or is it very badly worded?

Why do you need to stop your Marriage Allowance?

Do not need Marriage Allowance any more

Divorce, end of civil partnership or legally separated

Bereavement

None of above want it back from spouse.

I am trying to transfer it back to me from my spouse, but this says it will be cancelled from 6 Apr 26?

Is that correct?

eskbanker

MACKEM99 said:

Cancelling Marriage Allowance

"We will cancel your Marriage Allowance, but it will remain in place until 5 April 2026, the end of the current tax year.

Your Personal Allowance will not include any Marriage Allowance from 6 April 2026, the start of the new tax year.2"

This sounds like I will gain no benefit or is it very badly worded?

Wording could be better, what they should say is that your personal allowance will no longer have any adjustment for marriage allowance from then.

MACKEM99 said:

My marriage tax allowance is currently transferred to spouse but want to cancel it meaning my allowance should go back to standard wef 6 Apr 26.

[...]

Why do you need to stop your Marriage Allowance?

Do not need Marriage Allowance any more

Divorce, end of civil partnership or legally separated

Bereavement

None of above want it back from spouse.

I am trying to transfer it back to me from my spouse, but this says it will be cancelled from 6 Apr 26?

Is that correct?

Cancellation simply means reverting back to how it was before claiming, and yes, it applies from the start of the new tax year.

MACKEM99

Thanks so much I value your advice.
  

MACKEM99

Just done it and you get this:

You have asked us to cancel your Marriage Allowance. This means:

• your Marriage Allowance will remain in place until 5 April 2026
• 
  
• your Personal Allowance will go back to the normal amount from 6 April 2026
• 
  

Might have been helpful if they told you second sentence before committing!