This may become a Frequently Asked Question. This is the gist of a support query we recently received:
- the client is a basic rate taxpayer
- spouse earns £9621 per annum, so £979 of her personal allowance remains unused
The rules say that she can transfer ‘up to’ £1060 of her allowance as marriage allowance. But in this case only £979 is available.
The client was looking for a means to transfer the reduced figure in our software but this is not possible because the allowance is all or nothing, i.e. 10% of the person allowance. This year the figure is fixed at £1060 and the transfer is dependant only on the transferor being below the annual PA threshold.
This is how this particular case works out:
Spouse A has paid no tax on earnings of £9621
£1060 allowance is transferred so they then have a liability of £1060 - £979 = £81 @ 20% = £16.20
Assuming Spouse B has paid sufficient basic rate tax he will get an additional allowance of a maximum £212.00