Ending Married Couples Allowance Transfer

michaels

So, my wife applied to transfer her allowance to me a couple of years ago when we did our tax returns and the transfer was effectively backdated to the tax return year.

I assumed cancelling the transfer could also be done in the same manner - so cancel while doing our 25/26 returns to apply for the 25/26 tax yea rand arranged our incomes appropriately.

But it appears that not only can I not cancel for 25/26, I also can't cancel for 26/27….

This seems ridiculous when you can apply and have it backdated for up to 4 years and yet you can not end it for the current tax return year nor even the current tax year. So it would be impossible to only claim the allowance for a single year?

Have I really understood this correctly?!

eskbanker

Yes, cancellation applies from the next tax year, so a long wait if doing so early in the year like now.

If you cancel because of a change of income, the allowance will run until the end of the tax year (5 April).

https://www.gov.uk/marriage-allowance/if-your-circumstances-change

michaels

Each year when I do the tax return I answer:

Do you want to claim Marriage Allowance by transferring 10% of your personal allowance to your spouse/civil partner?

Which made me think I could I could chose each year….silly me

eskbanker

https://forums.moneysavingexpert.com/discussion/comment/81967312#Comment_81967312

No, once it's been started, it continues indefinitely until it's cancelled - there's no need to reapply each year.

Dazed_and_C0nfused

https://forums.moneysavingexpert.com/discussion/comment/81967312#Comment_81967312

If you have only been doing this on a tax return are you certain Marriage Allowance is in place for 2025/26?

Did either of you receive tax codes for 2025/26?

michaels

https://forums.moneysavingexpert.com/discussion/comment/81967326#Comment_81967326

It is the fact that whilst you can back date an application you are not able to opt out for the current tax return period that is the problem that has just cost me £430 :(

eskbanker

https://forums.moneysavingexpert.com/discussion/comment/81967331#Comment_81967331

How do you work out £430?

michaels

£252 income tax on 1260 plus £170 income tax on savings for which the 5000 (+1000) band is no longer fully available. We were very careful to each have 12,570 taxable income and under 6k of savings income. Of course I could have had more income myself and my DW less but I assumed we would be able to end the marriage allowance transfer. Instead it also applies to this tax year as well but I will have to try and work around it.

Dazed_and_C0nfused

https://forums.moneysavingexpert.com/discussion/comment/81967352#Comment_81967352

When you say under 6k of savings income, how much under is the person who seemingly has a Personal Allowance of £11,310?

michaels

£5579 so 'safely' under the 6k available to those who pay no IT on their taxable income….

Could easily have drawn 1260 less from pension to avoid this. Not sure where drawing 1260 more from my pension would have put me in terms of having the full 6k savings allowance though.

Dazed_and_C0nfused

https://forums.moneysavingexpert.com/discussion/comment/81967406#Comment_81967406

Well as you cannot have a Personal Allowance greater than £12,570 it would have reduced your savings starter rate band by £1,260.