When to cancel transfer of married allowance?

tigerspill

My wife has transferred 10% of her income tax allowance to me (marriage allowance).  She has only had very limited income for a number of years and didnt use all of her allowance.
Next April (in new 2026/2027 tax year) she will start to take her DB pension and will be paying basic rate tax.  So she will stop the marriage allowance transfer.

When should she apply to stop the transfer?  Before the end of this tax year or wait until next tax year when this will apply?

Thanks

Isthisforreal99

Before the end of the tax year - you cannot cancel it in year.

TadleyBaggie

Do it now, as it will automatically stop at the end of the current tax year. If you wait until the new tax year, it will continue for another year.

Dazed_and_C0nfused

tigerspill said:

My wife has transferred 10% of her income tax allowance to me (marriage allowance).  She has only had very limited income for a number of years and didnt use all of her allowance.
Next April (in new 2026/2027 tax year) she will start to take her DB pension and will be paying basic rate tax.  So she will stop the marriage allowance transfer.

When should she apply to stop the transfer?  Before the end of this tax year or wait until next tax year when this will apply?

Thanks

She has to do it in the current tax year.

If she waits until 6 April 2026 then it will continue until 5 April 2027.

Note as a basic rate payer she is still eligible for Marriage Allowance so the onus is on her to cancel it if she wants the full Personal Allowance back for 2026/27.

cannugec5

Actually this has made me think. My husband has had benefit of my transferred allowance but now I’ve started paying tax again with a marginally increased income.  Is there any reason NOT to make any changes? 

tigerspill

Dazed_and_C0nfused said:

tigerspill said:

My wife has transferred 10% of her income tax allowance to me (marriage allowance).  She has only had very limited income for a number of years and didnt use all of her allowance.
Next April (in new 2026/2027 tax year) she will start to take her DB pension and will be paying basic rate tax.  So she will stop the marriage allowance transfer.

When should she apply to stop the transfer?  Before the end of this tax year or wait until next tax year when this will apply?

Thanks

She has to do it in the current tax year.

If she waits until 6 April 2026 then it will continue until 5 April 2027.

Note as a basic rate payer she is still eligible for Marriage Allowance so the onus is on her to cancel it if she wants the full Personal Allowance back for 2026/27.

So if I look at us as a couple - am I right in thinking that this doesn't actually matter if we are both basic rate tax payers in that together we have combined allowances of 2 x £12,570 and regardless how this is split, it wont affect our joint net income?
PS.  I ask this to fully understand the scenario rather than suggesting we will do this.  

Sea_Shell

I thought that it automatically cancelled once the 'donor' pays a single penny of income tax, over their current lower personal allowance?

Interested, as this will be me this time next year. 

Do I drawdown at my lower allowance and leave DH to have the higher limit, or DD up to my standard PA and so his taxable income goes up?

  

Dazed_and_C0nfused

tigerspill said:

Dazed_and_C0nfused said:

tigerspill said:

My wife has transferred 10% of her income tax allowance to me (marriage allowance).  She has only had very limited income for a number of years and didnt use all of her allowance.
Next April (in new 2026/2027 tax year) she will start to take her DB pension and will be paying basic rate tax.  So she will stop the marriage allowance transfer.

When should she apply to stop the transfer?  Before the end of this tax year or wait until next tax year when this will apply?

Thanks

She has to do it in the current tax year.

If she waits until 6 April 2026 then it will continue until 5 April 2027.

Note as a basic rate payer she is still eligible for Marriage Allowance so the onus is on her to cancel it if she wants the full Personal Allowance back for 2026/27.

So if I look at us as a couple - am I right in thinking that this doesn't actually matter if we are both basic rate tax payers in that together we have combined allowances of 2 x £12,570 and regardless how this is split, it wont affect our joint net income?
PS.  I ask this to fully understand the scenario rather than suggesting we will do this.  

It isn't quite that simple no.  You need to look at the impact on each person individually.

It wouldn't be good for Mrs Tigerspill to retain Marriage Allowance and pay an extra £252 in tax if you were only saving say £200 by having the Marriage Allowance reduction.

But if you are getting the full benefit and saving £252 then once her pension income reaches £12,570 it balances out between the two of you.

There can be more niche impacts as well, if Marriage Allowance remains in place and Mrs Tigerspill pays basic rate tax on d/say £1,260 of her pension then that reduces her savings starter rate band by £1,260.  Which might not be of any relevance to her but it will be to some people.

Dazed_and_C0nfused

Sea_Shell said:

I thought that it automatically cancelled once the 'donor' pays a single penny of income tax, over their current lower personal allowance?

Interested, as this will be me this time next year. 

Do I drawdown at my lower allowance and leave DH to have the higher limit, or DD up to my standard PA and so his taxable income goes up?

No, providing neither person is deemed a higher rate payer then they are still eligible and HMRC won't cancel it.

If you have a lot of (taxable) interest then you might want to think of potential impact on the savings starter rate band by paying tax you don't strictly need to.

Sea_Shell

Dazed_and_C0nfused said:

Sea_Shell said:

I thought that it automatically cancelled once the 'donor' pays a single penny of income tax, over their current lower personal allowance?

Interested, as this will be me this time next year. 

Do I drawdown at my lower allowance and leave DH to have the higher limit, or DD up to my standard PA and so his taxable income goes up?

No, providing neither person is deemed a higher rate payer then they are still eligible and HMRC won't cancel it.

If you have a lot of (taxable) interest then you might want to think of potential impact on the savings starter rate band by paying tax you don't strictly need to.

Good Point.   Nearly all our taxable interest is in my name.   So I will have to keep an eye on this.   Especially if interest rates rise.

tigerspill

Dazed_and_C0nfused said:

tigerspill said:

Dazed_and_C0nfused said:

tigerspill said:

My wife has transferred 10% of her income tax allowance to me (marriage allowance).  She has only had very limited income for a number of years and didnt use all of her allowance.
Next April (in new 2026/2027 tax year) she will start to take her DB pension and will be paying basic rate tax.  So she will stop the marriage allowance transfer.

When should she apply to stop the transfer?  Before the end of this tax year or wait until next tax year when this will apply?

Thanks

She has to do it in the current tax year.

If she waits until 6 April 2026 then it will continue until 5 April 2027.

Note as a basic rate payer she is still eligible for Marriage Allowance so the onus is on her to cancel it if she wants the full Personal Allowance back for 2026/27.

So if I look at us as a couple - am I right in thinking that this doesn't actually matter if we are both basic rate tax payers in that together we have combined allowances of 2 x £12,570 and regardless how this is split, it wont affect our joint net income?
PS.  I ask this to fully understand the scenario rather than suggesting we will do this.  

It isn't quite that simple no.  You need to look at the impact on each person individually.

It wouldn't be good for Mrs Tigerspill to retain Marriage Allowance and pay an extra £252 in tax if you were only saving say £200 by having the Marriage Allowance reduction.

But if you are getting the full benefit and saving £252 then once her pension income reaches £12,570 it balances out between the two of you.

There can be more niche impacts as well, if Marriage Allowance remains in place and Mrs Tigerspill pays basic rate tax on d/say £1,260 of her pension then that reduces her savings starter rate band by £1,260.  Which might not be of any relevance to her but it will be to some people.

Thank you.  Valid points.  In my case, it will balance out in money terms.  I need to check the savings aspect.