Married tax allowance and state pension?

janbeno

Hi, for 5 or so years before I retired I gave my unused tax to hubby as I didn't work. I have now been retired for 4 years and he still benefits from this. But now with the pension increases I am getting closer to the tax threshold . 

I only have the state pension but I did manage to purchase some back years which really boosted my pension.

I get at the moment £868.36 pm. So multiplied by 13 this gives me £11,288.68 which is £22 under the threshold at the mo. [£11310].

When the pension increases next year it will take me above the threshold, but I also read that it's better for the lower 'earner' to still give the tax break as they pay less tax than the receiver. 

My question is, as I don't have a private pension like hubby for tax to be deducted from will I still be able to give him the allowance and if so how will HMRC tax me?

Dazed_and_C0nfused

janbeno said:

Hi, for 5 or so years before I retired I gave my unused tax to hubby as I didn't work. I have now been retired for 4 years and he still benefits from this. But now with the pension increases I am getting closer to the tax threshold . 

I only have the state pension but I did manage to purchase some back years which really boosted my pension.

I get at the moment £868.36 pm. So multiplied by 13 this gives me £11,288.68 which is £22 under the threshold at the mo. [£11310].

When the pension increases next year it will take me above the threshold, but I also read that it's better for the lower 'earner' to still give the tax break as they pay less tax than the receiver. 

My question is, as I don't have a private pension like hubby for tax to be deducted from will I still be able to give him the allowance and if so how will HMRC tax me?

You will normally be sent a Simple Assessment tax calculation in the summer after the end of the tax year and have to pay the tax due by 31 January.

So it might be calculation in say July 2026 and tax needs paying by 31 January 2027.

If he has sufficient income then Marriage Allowance will save him £252 each year so providing you are paying less than that you are still better off as a couple.

janbeno

Dazed_and_C0nfused said:

janbeno said:

Hi, for 5 or so years before I retired I gave my unused tax to hubby as I didn't work. I have now been retired for 4 years and he still benefits from this. But now with the pension increases I am getting closer to the tax threshold . 

I only have the state pension but I did manage to purchase some back years which really boosted my pension.

I get at the moment £868.36 pm. So multiplied by 13 this gives me £11,288.68 which is £22 under the threshold at the mo. [£11310].

When the pension increases next year it will take me above the threshold, but I also read that it's better for the lower 'earner' to still give the tax break as they pay less tax than the receiver. 

My question is, as I don't have a private pension like hubby for tax to be deducted from will I still be able to give him the allowance and if so how will HMRC tax me?

You will normally be sent a Simple Assessment tax calculation in the summer after the end of the tax year and have to pay the tax due by 31 January.

So it might be calculation in saying July 2026 and tax needs paying by 31 January 2027.

If he has sufficient income then Marriage Allowance will save him £252 each year so providing you are paying less than that you are still better off as a couple.

Thanks for this, yes he has a small private pension but he does benefit from the tax break. The amount of tax I would pay would be a lot less than his. I wasn't sure whether HMRC would say I couldn't pass the allowance to him as I only had a state pension.

Thank you for taking the time to answer my question.

Dazed_and_C0nfused

janbeno said:

Dazed_and_C0nfused said:

janbeno said:

Hi, for 5 or so years before I retired I gave my unused tax to hubby as I didn't work. I have now been retired for 4 years and he still benefits from this. But now with the pension increases I am getting closer to the tax threshold . 

I only have the state pension but I did manage to purchase some back years which really boosted my pension.

I get at the moment £868.36 pm. So multiplied by 13 this gives me £11,288.68 which is £22 under the threshold at the mo. [£11310].

When the pension increases next year it will take me above the threshold, but I also read that it's better for the lower 'earner' to still give the tax break as they pay less tax than the receiver. 

My question is, as I don't have a private pension like hubby for tax to be deducted from will I still be able to give him the allowance and if so how will HMRC tax me?

You will normally be sent a Simple Assessment tax calculation in the summer after the end of the tax year and have to pay the tax due by 31 January.

So it might be calculation in saying July 2026 and tax needs paying by 31 January 2027.

If he has sufficient income then Marriage Allowance will save him £252 each year so providing you are paying less than that you are still better off as a couple.

Thanks for this, yes he has a small private pension but he does benefit from the tax break. The amount of tax I would pay would be a lot less than his. I wasn't sure whether HMRC would say I couldn't pass the allowance to him as I only had a state pension.

Thank you for taking the time to answer my question.

The only thing that would normally make either of you ineligible is if either of became a higher rate tax payer.

Two people each on £25k are eligible, it just doesn't normally make sense to apply in that situation.

Rodders53

Dazed_and_C0nfused said:

The only thing that would normally make either of you ineligible is if either of became a higher rate tax payer.

That's the one thing that is likely to clobber us in the next year (or maybe two) with the unmoving personal tax allowance and my SP plus DBP...  In some ways a nice problem to have.  I've declined the WFP already although my wife remains eligible.

Note SP is paid weekly / 4-weekly not monthly... (although the 4-weekly x 13 calculation is approximately correct). 

But personal allowance is currently £12,570 pa. 

So you (OP) may not have to worry about this for a few more years.

(My wife's full NSP is £230.25 pw, £921.00/4 wks =  £11,973 pa roughly fwiw).

Dazed_and_C0nfused

Rodders53 said:

Dazed_and_C0nfused said:

The only thing that would normally make either of you ineligible is if either of became a higher rate tax payer.

That's the one thing that is likely to clobber us in the next year (or maybe two) with the unmoving personal tax allowance and my SP plus DBP...  In some ways a nice problem to have.  I've declined the WFP already although my wife remains eligible.

Note SP is paid weekly / 4-weekly not monthly... (although the 4-weekly x 13 calculation is approximately correct). 

But personal allowance is currently £12,570 pa. 

So you (OP) may not have to worry about this for a few more years.

(My wife's full NSP is £230.25 pw, £921.00/4 wks =  £11,973 pa roughly fwiw).

If the expected 4.7% triple lock increase comes true then the benefit of Marriage Allowance will drop to ~£7 and then after that it's likely Mrs Rodders53 will be cancelling it and minimising her own tax liability!