This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. To find out more about cookies on this website and how to delete cookies, see our Cookie Policy.

Tools which collect anonymous data to enable us to see how visitors use our site and how it performs. We use this to improve our products, services and user experience.


Tools that enable essential services and functionality, including identity verification, service continuity and site security.

Where Taxpayers and Advisers Meet

Creating a tax liability with the marriage allowance

Joined:Thu Jul 16, 2009 12:39 pm
Creating a tax liability with the marriage allowance

Postby Nonimous » Fri May 17, 2019 4:42 pm

Just starting a 2018/19 return and have had a thought.

Mr M has a total income of £11760, which is below the personal allowance of £11,850.

If he surrenders 10% of his personal allowance he will have a personal allowance of £10,660. Of the £1100 which is now taxable, £300 is savings income so is taxable at 0% as below the £1000 allowance. He is therefore liable to tax at 20% on £800, making tax due of £160. If he had not surrendered his personal allowance he would have no tax liability at all.

Mrs M, meanwhile, has non-savings income of £21,000 and the transfer of part of her husband's personal allowance saves her £238 (being £1190 at 20%).

Net saving therefore £78

Is there any reason why one CANNOT do this? I understand that for various reasons a couple might not WANT to, but is there a reason why they CAN'T?

Joined:Thu Dec 22, 2016 10:04 pm

Re: Creating a tax liability with the marriage allowance

Postby D&C » Fri May 17, 2019 10:39 pm

You are basically correct but do have one thing wrong, albeit it makes no material difference.

Mr M cannot make use of the savings nil rate band (PSA) as this is not available to such low income individuals.

M will pay 20% tax (or 19% if Scottish resident in 2018:19) on the non-savings income above £10,660 but the £300 savings interest will then be taxed at the savings starter rate. Which is 0%.

Providing Mr M isn't considered a higher rate payer then he is eligible to apply. He could have taxable income of £40k and be eligible for Marriage Allowance. There would usually be no benefit in doing so as he would end up with a bill equivalent to the tax credit Mrs M would end up with but eligibility and being able to benefit are two distinct things when it comes to Marriage Allowance :)

Return to “Income Tax”