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Re marriage allowance

When can it apply?

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Self employed client's income is usually less than personal allowance so 10% of the allowance is transferred to her husband.  Thanks to a Local authority grant of £10000 in May 2020 her income for 2020/21 is approximately £18000.  However, the HMRC tax calculation is still transferring 10% of the allowance to her spouse.  Surely this is incorrect?

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By emanresu
12th Apr 2021 14:11

Taxable Income of more than the Personal Allowance doesn't per se switch off MAT. What will change is the benefit MAT provides to the couple involved.

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RLI
By lionofludesch
12th Apr 2021 14:13

No, it's grand. I'm assuming she hasn't withdrawn the transfer authority.

Marriage Allowance can still be beneficial where - commonly - one partner's marginal rate is 20% and the other's is 7½%.

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Replying to lionofludesch:
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By John Stone
12th Apr 2021 16:23

Thanks Lion. No - not withdrawn but both are 20% taxpayers so no overall advantage. But client is self employed and spouse not. Owing to payments on account situation, there would seem to be a cash flow disadvantage now resulting from the transfer. So does the transfer still operate unless I go to the trouble of negating the claim previously operative?

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Replying to John Stone:
RLI
By lionofludesch
12th Apr 2021 17:14

John Stone wrote:

Thanks Lion. No - not withdrawn but both are 20% taxpayers so no overall advantage. But client is self employed and spouse not. Owing to payments on account situation, there would seem to be a cash flow disadvantage now resulting from the transfer. So does the transfer still operate unless I go to the trouble of negating the claim previously operative?

Yes. For a few quid in timing difference, I wouldn't bother. There's a good chance you'll want it back next year.

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A Putey FACA
By Arthur Putey
13th Apr 2021 11:45

Like the idea of a re-marriage allowance!

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