Tax on Pension

trufftruff_woo

Hello!

         Part of my wife’s allowance was allocated to me and her allowance is now £11,313. (Full new pension)

This means, after the pension rise for 2026, she will owe £247 in tax.

As you haven’t mentioned how it will affect people who transferred part of their allowance and given that this is a significant amount, will she have to pay this back or as Ms Reeves stated, she will not??

GrumpyDil

That's a different situation where she has transferred some of her allowance to you. In this scenario I'd expect the options to be that she either take the allowance back or pays the tax.

Dazed_and_C0nfused

GrumpyDil said:

That's a different situation where she has transferred some of her allowance to you. In this scenario I'd expect the options to be that she either take the allowance back or pays the tax.

But as it stands she wouldn't have to pay the tax, assuming she has just the standard new State Pension and no other taxable income.

However it is a rather obvious loophole so will presumably be considered once the fine detail gets worked through.

trufftruff_woo

Yes, it is her only taxable income.

maisie_cat

Googled it

If you are no longer eligible for the Marriage Allowance, you must cancel it by informing HM Revenue and Customs (HMRC). This can be done online or by phone. 

Reasons to Cancel

You need to cancel your claim if any of the following apply:

• Your relationship ends: This includes divorce, dissolving a civil partnership, or legal separation.
• Your income changes: This happens if the lower earner's income exceeds the personal allowance (currently £12,570 for the 2025-26 tax year), or the higher earner starts paying tax at a higher rate.
• You no longer wish to claim. 

Dazed_and_C0nfused

maisie_cat said:

Googled it

If you are no longer eligible for the Marriage Allowance, you must cancel it by informing HM Revenue and Customs (HMRC). This can be done online or by phone. 

Reasons to Cancel

You need to cancel your claim if any of the following apply:

• Your relationship ends: This includes divorce, dissolving a civil partnership, or legal separation.
• Your income changes: This happens if the lower earner's income exceeds the personal allowance (currently £12,570 for the 2025-26 tax year), or the higher earner starts paying tax at a higher rate.
• You no longer wish to claim. 

That isn't their legislation though.  You are eligible to apply as long as you aren't a higher rate payer.