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Where Taxpayers and Advisers Meet

Marriage Allowance Transfer

emmylou67
Posts:2
Joined:Tue Jun 22, 2021 3:58 pm
Marriage Allowance Transfer

Postby emmylou67 » Tue Jun 22, 2021 4:04 pm

Looking for a bit of help here. My income for the last couple of years has been just below the tax paying rate (around the £12,000 mark) whilst my husband has been around £30,000.

I tried to apply for Marriage Allowance but i've been told that i don't qualify when i know i do - is this right that I wouldn't be eligible for it?

Lambs
Posts:1559
Joined:Wed Aug 06, 2008 3:15 pm

Re: Marriage Allowance Transfer

Postby Lambs » Tue Jun 22, 2021 4:33 pm

E,

I am not sure who or what is telling you that you don't qualify but what is the reason given, please? Is it simply that your income exceeds your Personal Allowance? This is a condition wrongly set out by many commentators and, for the most part, instigated by HMRC. It is possible that there is another reason, however, so I'd like to be a bit more clear on the circumstances.

Kind regards,

Lambs

emmylou67
Posts:2
Joined:Tue Jun 22, 2021 3:58 pm

Re: Marriage Allowance Transfer

Postby emmylou67 » Wed Jun 23, 2021 7:01 am

Hi there - they said that there would be no benefit to me making the claim because it would then make me a tax payer because of my income but my husband would still get all of the allowance so i don't understand how that wouldn't be a beenfit to us?

Lambs
Posts:1559
Joined:Wed Aug 06, 2008 3:15 pm

Re: Marriage Allowance Transfer

Postby Lambs » Wed Jun 23, 2021 8:34 am

E,

If you transfer (the transferrable part of) your Tax Allowance, then:

You forfeit 10% of your Personal Allowance, which may well mean that you pay more tax in your case, and

Your husband will get a tax reduction at the Basic Rate.


For example, in 2021/22, that would be:

A reduction in your Personal Allowance of £1,260

A reduction in his Income Tax liability of £252

If you are not currently utilising ALL your tax-free Personal Allowance - and it would seem that you are not - then you may well be marginally better off - his tax reduction will be larger than your actual tax cost.

Does that make sense?

Kind regards,

Lambs

robbob
Posts:3137
Joined:Wed Aug 06, 2008 4:01 pm

Re: Marriage Allowance Transfer

Postby robbob » Wed Jun 23, 2021 8:46 am

You have been told porkies - you are eligible as long as spouse not subject to higher rate tax (i may have slightly simolified rules here)

Note however hmrc (or whoever) are rightly warning you that there are specific issues ref transfer as transfer specifically generate a tax bill for you so based on quoted numbers you need to be aware of that fact - Lambs has neatly laid out the principles- so you will probably get £140 ish tax bill which you need to pay while spouse will get tax reduction of 252 - bit of a no brainer if you ignore the trauma that is involved with dealing with hmrc.

Any advisor who tells you otherwise is talking tosh - unfortunately hmrc traing and procedural manuals ref marriage transfers are very poor so its not always the poor advisors fault that they talk tosh.


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