Married Couples Tax Allowance

[NeckPain]

Hi, first post from a lurker.

I currently earn just over the 40% tax band, my spouse does not earn enough to pay tax. Salary sacrifice into my pension puts me back into basic rate tax territory. Does anyone know if we are entitled to claim the married couples tax allowance? (Yes I know its t'other half that will actually have to claim it to push it over to me.)

Anything I have found so far, just goes "only if you are a basic rate taxpayer." Well I am, but only due to salary sacrifice, so I haven't done anything about it but I do wonder...

Thanks

[PinkDalek]

Hi, first post from a lurker.

I currently earn just over the 40% tax band, my spouse does not earn enough to pay tax. ...

Welcome to TLF and congratulations on your first post.

Can you confirm one of you was born before 6 April 1935?

From https://www.gov.uk/married-couples-allowance

If that's not the case, you should be looking at https://www.gov.uk/marriage-allowance.

I've yet to find precise confirmation but that talks of the higher taxpayer's income between £12,501 and £50,000 and from what you say you are in that band and are a basic rate taxpayer.

This randomly found article https://www.taxadvisermagazine.com/article/marriage-allowance-1 includes:

Where a taxpayer has an extended basic rate band, for example as a result of gift aid payments or pension contributions, it is that extended basic rate band that is used to determine whether the taxpayer is a basic rate taxpayer or not and thus whether marriage allowance may be claimed.


There are similar articles available using the search term marriage allowance extended basic rate band which would appear to confirm.

[NeckPain]

Thanks for responding.

No, not that old. I meant the Marriage Allowance. I realised that after posting. My concern is that I'm only in that band because of the salary sacrifice but then I am giving up salary so that my "real" salary is lower but I just couldn't find any references to confirm that I (well we) are eligible.

I hadn't come across the term "extended basic rate band".

Thanks for the link. I shall have a look now.

[PinkDalek]

I probably sent you down the wrong track on extended basic rate bands, thinking you'd mentioned pension contributions. Come what may, surely salary sacrifice has a similar impact, such that you are a basic rate taxpayer and should qualify.

Maybe you should look here https://www.gov.uk/guidance/salary-sacrifice-and-the-effects-on-paye and at the links therein, if you haven't already so done, but it would be easy to get bogged down in detail over there.

Why not suggest your Wife applies using https://www.gov.uk/apply-marriage-allowance and see what questions are asked?

I got as far as the page for the higher earner which states:

This is their total earnings from all employment, pensions, benefits, trusts, rental income, including dividend income above their Dividend Allowance – before any tax and National Insurance is taken off.

They still don't define earnings but surely they mean taxable earnings and presumably they check the claim anyway.

Have you used the calculator https://www.tax.service.gov.uk/marriage-allowance-application/benefit-calculator to see how much is potentially involved?