Marriage Allowance

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  • Frozenpines
    Frozenpines Posts: 20 Forumite
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    Anyone have an idea how the new Scottish income tax bands (19, 20, 21%) will affect eligibility for marriage allowance? Currently a basic rate tax payer but due to be in the 21% band as of next month. Couldn't see anything on the Scottish Gov or HMRC websites...
  • Dazed_and_confused
    Dazed_and_confused Posts: 6,458 Forumite
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    It is covered in this blog and there is no suggestion it will be given at a different rate in Scotland i.e. the recipient would be entitled to a tax credit of £238 in 2018:19 (£1190 x 20%).

    Legislation is apparently going to be changed to ensure people liable at the two new starter and intermediate rates are still eligible (providing they don't stray into the higher rate).

    https://www.tax.org.uk/media-centre/blog/technical/scottish-income-tax-rates-and-thresholds-%E2%80%93-what-do-changes-mean-scottish
  • twitterers
    twitterers Posts: 10 Forumite
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    :money:

    Just wondering how this works if the couple are married in Pakistan but not in the UK?
  • polymaff
    polymaff Posts: 3,904 Forumite
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    Callumcruickshank wrote: »
    Anyone have an idea how the new Scottish income tax bands (19, 20, 21%) will affect eligibility for marriage allowance? Currently a basic rate tax payer but due to be in the 21% band as of next month. Couldn't see anything on the Scottish Gov or HMRC websites...

    Might be worth keeping an eye on legislation.gov where an SI may be used - like the one that incorporated the original concept of the Scottish Basic Rate into the Income Tax act:

    http://www.legislation.gov.uk/uksi/2015/1810/article/14/made#article-14-4
  • manuncrod77
    manuncrod77 Posts: 6 Forumite
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    I saw the article about claiming Marriage Allowance in Martin's newsletter, followed the simple instructions about how to claim and in no time at all my wife and I were the proud owners of £662! (Well £432 now and £230 in the tax year 2018/19)
    I always read the newsletters and boy, did it pay off this time! I'm retired and pay tax on my pensions, my wife is a non-taxpayer so the claim was made online in her name and a few hours later she got an email to say that we were entitled to claim, and a few days after that I got a cheque for £432 in the post. Cheers Martin!
  • Dazed_and_confused
    Dazed_and_confused Posts: 6,458 Forumite
    Uniform Washer
    edited 26 March 2018 at 8:26PM
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    my wife and I were the proud owners of £662! (Well £432 now and £230 in the tax year 2018/19)

    You may have slightly misunderstood (but in a good way ;))

    £662 is the standard amount for 2015:16 and 2016:17 tax years but for 2018:19 it is £238, not £230.

    But £230 is the standard amount for 2017:18 so whichever way you look at it if your wife applied for 2017:18 as well as the other three years you are going to be £230+ better off than you originally thought. You would normally get a new tax code and refund through your pension for the current tax year but it's probably too late in the year for that to happen now for 2017:18 so presumably you'll get another cheque from HMRC in due course when they have reviewed 2017:18.
  • manuncrod77
    manuncrod77 Posts: 6 Forumite
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    :rotfl:
    You're right, I did misunderstand, and definitely in a good way! At this rate HMRC's gonna go bust!:T
  • jaunty_jag
    jaunty_jag Posts: 3 Newbie
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    Using 2017/18 rates, if you earn less than 11500 ( below basic rate tax payer level) , you can get savings interest of 6000 tax free.

    If my wife transfers her Marriage Allowance to me , does that increase the level you can earn by 1150 to 12650 (as this is still below basic tax payer level)?

    Or do you start to pay tax on savings interest at a lower level now ?

    Many Thanks
  • Dazed_and_confused
    Dazed_and_confused Posts: 6,458 Forumite
    Uniform Washer
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    Using 2017/18 rates, if you earn less than 11500 ( below basic rate tax payer level) , you can get savings interest of 6000 tax free.

    If my wife transfers her Marriage Allowance to me , does that increase the level you can earn by 1150 to 12650 (as this is still below basic tax payer level)?

    Or do you start to pay tax on savings interest at a lower level now ?

    No, Marriage Allowance doesn't entitle you to any extra allowances.

    If your wife applies for Marriage Allowance for 2017:18 she is giving up part of her Personal Allowance but you don't get that, you get a deduction from your tax bill. Basically your own tax bill would be calculated as normal (including, if applicable, the savings and Personal Savings Allowance rate bands) and you get £230 (for 2017:18) knocked off the tax you need to pay for the year - this is the Marriage Allowance (if you don't need to pay as much as £230 then the benefit of Marriage Allowance is limited to whatever your tax bill is). .
  • Mummy81
    Mummy81 Posts: 62 Forumite
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    Hi all,

    I need some advice. I start teacher training this year - my last paycheck will be August and I will have earned approx 6k, from this point on I will earn nothing until, hopefully, September 2019. Does it make sense for me to transfer my allowance to my husband?

    Also, if I do this should I cancel it at the end of the financial year 2019/20?

    Sorry lots of questions.

    Thanks in advance
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