Has your claim for marriage allowance transfer been refused?

10th April 2019

 

HMRC have recently attempted to remove a marriage allowance transfer for a couple, where the transferor had less than the 10% personal allowance unused. This treatment is incorrect as outlined below:

 

Background to the transfer

The marriage allowance transfer was introduced from 5 April 2015 onwards and allows a person to transfer 10% of their personal allowance to their husband, wife or civil partner. This is available when both parties are married or in a civil partnership and are basic rate tax payers before and after the transfer.

 

For the claim to be beneficial one party’s income should fall within their 0% tax bands and personal allowance, for 2019/20 this is £12,500. If income is below this level, a flat amount of 10% (£1,250 of the personal allowance) can be transferred leaving the transferor with a new allowance of £11,250.

 

The issue for transferor with less than 10% of their personal allowance available

 

Where the transferor has less than 10% of their personal allowance unused before the transfer, they are still able to make the claim; however, any amount above the new personal allowance after transfer will become taxable at the basic rate.

 

We have found in some cases, however, that HMRC have been removing the marriage allowance transfer if there is not the full 10% personal allowance available. This is the incorrect treatment and should this happen to you; please be sure to question this with HMRC.

 

Please note: If you qualify for the marriage allowance transfer, you may be able to make a backdated claim from 5 April 2015 onwards (the date the transfer became available).

 

To check if you are eligible to claim and to find out the potential tax savings for your household, there is a HMRC Marriage Allowance calculator that may be of use: https://www.tax.service.gov.uk/marriage-allowance-application/benefit-calculator/

 

If you have any questions on the matters outlined above or think this may affect you, please contact us and one of our team will be happy to help: https://www.whitingandpartners.co.uk/about-us/contact-us/



 
Other items in Blogs
 
Matilda Mawson
24th February 2020 An update for NHS staff on the annual allowance charge for 2019/20

Current Issues The introduction of the tapered pension annual allowance from 6 April 2016 has been a contentious issue for many, in particular senior NHS staff members. The legislation change means that, for high income individuals, the annual pension allowance may be reduced from £40,000 to a minimum of £10,000. Pension inputs in excess of…

Read More »

Jodie Tarbin
24th February 2020 How taking a pension lump sum could save you money

  If you reached state pension age after 6 April 2016 and deferred taking your pension, you will receive a higher weekly amount when you start receiving it. However, if you reached state pension age before 6 April 2016 there is a second option, which is to receive a state pension lump sum rather than…

Read More »

Vanessa Pearson
18th February 2020 6 April: A Guide to Off-Payroll Working Tax Rules

There are less than two months to go until the proposed new rules apply regarding who determines IR35 status for freelancers hired by medium and large companies. Our Brief Guide will help find out how this affects you and what you can do   A Brief Guide to Off-payroll Working_Feb 2020

Read More »

Matilda Mawson
14th February 2020 5th April: Pre Year End Tax Planning

As we approach the end of another personal tax year (5 April 2020), there are a number of tax planning opportunities for individuals to consider to ensure best use is made of currently available allowances, exemptions and favourable tax rates:   Tax year end planning Brief Guide_Feb 2020   With the 2020 Budget also just…

Read More »

Jaimie King
12th February 2020 Successful tax refund for grain silo treatment

A successful legal case claiming that grain silos should be treated as plant and machinery for corporation tax purposes – rather than land and buildings – has resulted in a successful tax refund claim by Whitings.   The claim was submitted following precedent set in the legal case, and resulted in a substantial tax refund…

Read More »

Andrew Band
3rd February 2020 Whitings Annual Farming Seminar – Invite

  Clients in the farming sector, related sectors and professional contacts are invited to attend the ninth annual Whiting & Partners Farming Seminar. This is being held on Wednesday 25 March 2020, at the Maltings in Ely:   A5_Flyer_Farming_Seminar20   Presenters from the Andersons Centre will once again look forward to the year ahead, post…

Read More »