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  • FIRST POST
    • capital0ne
    • By capital0ne 13th Apr 18, 7:16 PM
    • 412Posts
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    capital0ne
    Transferring Spouse's tax allowance
    • #1
    • 13th Apr 18, 7:16 PM
    Transferring Spouse's tax allowance 13th Apr 18 at 7:16 PM
    You can transfer 10% of your spouses tax allowance, can a higher rate tax payer do this?
Page 1
    • TadleyBaggie
    • By TadleyBaggie 13th Apr 18, 7:19 PM
    • 2,705 Posts
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    TadleyBaggie
    • #2
    • 13th Apr 18, 7:19 PM
    • #2
    • 13th Apr 18, 7:19 PM
    No. The income rules are:

    you don't earn anything or your income is 11,850 or less

    your partner's income is between 11,851 and 46,350 (or 43,430 if you're in Scotland)
    • Dazed and confused
    • By Dazed and confused 13th Apr 18, 10:16 PM
    • 2,466 Posts
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    Dazed and confused
    • #3
    • 13th Apr 18, 10:16 PM
    • #3
    • 13th Apr 18, 10:16 PM
    You can transfer 10% of your spouses tax allowance, can a higher rate tax payer do this

    No you can't. Your spouse can apply for Marriage Allowance.

    Your spouse can apply as long as they aren't a higher rate payer.

    You can then benefit from Marriage Allowance providing you aren't a higher rate payer*
    * there is an unusual situation involving dividend income which means you can be a basic rate payer and still not be able to benefit but if you don't have dividend income its not something you need to be concerned with.

    There are no income limits with eligibility for Marriage Allowance however the ability to be able to benefit from it is dependent on income. If your spouse had income of at least the Personal Allowance (or more) it would usually only be worthwhile applying if some of her income was savings interest or dividends. In this situation she would be making herself liable to tax but could be taxed at one of numerous 0% tax rates currently in place.
    • capital0ne
    • By capital0ne 14th Apr 18, 5:18 PM
    • 412 Posts
    • 203 Thanks
    capital0ne
    • #4
    • 14th Apr 18, 5:18 PM
    • #4
    • 14th Apr 18, 5:18 PM
    Thanks for those answers, just to clarify the question (Re-reading it - it wasnt' to clear) my wife paid no tax in 2016-17 - she earned just below the tax allowance.

    I just tipped into 40% higher tax allowance, can she elect to give me some of her allowance (10% - 1,100) I believe. I paid 40% on 590, so If I had an extra 1,100 allowance I would drop out of the 40% band and my Personal Savings Allowance would be 1,000 and not 500?
    • Dazed and confused
    • By Dazed and confused 14th Apr 18, 5:54 PM
    • 2,466 Posts
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    Dazed and confused
    • #5
    • 14th Apr 18, 5:54 PM
    • #5
    • 14th Apr 18, 5:54 PM
    I just tipped into 40% higher tax allowance, can she elect to give me some of her allowance (10% - 1,100) I believe. I paid 40% on 590, so If I had an extra 1,100 allowance I would drop out of the 40% band and my Personal Savings Allowance would be 1,000 and not 500?

    Marriage Allowance doesn't actually entitle you to any additional allowances. If your wife applied yes she would be giving up some of her Personal Allowance but in return you dont receive any extra allowances, you get a deduction from your tax bill of 230 for 2017:18 (1150 x 20%).

    https://www.litrg.org.uk/tax-guides/tax-basics/what-tax-allowances-am-i-entitled#toc-what-is-the-marriage-allowance-

    Irrespective of that though the higher rate test comes first, you are a higher rate payer so not eligible.

    For 2018:19 you could make personal pension contributions or give money to charity under the Gift Aid scheme, each of these things increases the amount of basic rate tax you pay so could bring you out of the higher rate bracket and then you could become eligible for Marriage Allowance. Not recommending that just making you aware of the possibility.
    Last edited by Dazed and confused; 14-04-2018 at 5:57 PM.
    • capital0ne
    • By capital0ne 14th Apr 18, 11:29 PM
    • 412 Posts
    • 203 Thanks
    capital0ne
    • #6
    • 14th Apr 18, 11:29 PM
    • #6
    • 14th Apr 18, 11:29 PM
    Cheers Dazed, I don't think it will be wothwhile, but I'll check what affect it may have on my wife's tax position. Should have been more careful in 2016-17 - my own fault :-(
    • polymaff
    • By polymaff 15th Apr 18, 9:38 AM
    • 2,046 Posts
    • 884 Thanks
    polymaff
    • #7
    • 15th Apr 18, 9:38 AM
    • #7
    • 15th Apr 18, 9:38 AM
    No. The income rules are:

    you don't earn anything or your income is 11,850 or less

    your partner's income is between 11,851 and 46,350 (or 43,430 if you're in Scotland)
    Originally posted by TadleyBaggie
    Wrong for UK-based taxpayers, for whom the rule is that neither should be - or would be as a result of the MAT - a higher-rate taxpayer.
    • TadleyBaggie
    • By TadleyBaggie 15th Apr 18, 10:07 AM
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    TadleyBaggie
    • #8
    • 15th Apr 18, 10:07 AM
    • #8
    • 15th Apr 18, 10:07 AM
    Wrong for UK-based taxpayers, for whom the rule is that neither should be - or would be as a result of the MAT - a higher-rate taxpayer.
    Originally posted by polymaff
    Tell HRMC that, that was a straight copy paste from their website.
    • polymaff
    • By polymaff 15th Apr 18, 10:12 AM
    • 2,046 Posts
    • 884 Thanks
    polymaff
    • #9
    • 15th Apr 18, 10:12 AM
    • #9
    • 15th Apr 18, 10:12 AM
    Tell HRMC that, that was a straight copy paste from their website.
    Originally posted by TadleyBaggie
    The HMRC website is wrong - and they know it. Now, so do you.

    Use better sources - like legislation.gov - and you won't propagate HMRC nonsense.
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