Commentary

E1.926 Married couple's allowance—examples

Personal and employment tax

E1.926 Married couple's allowance—examples

E1.926 Married couple's allowance—examples

These examples illustrate points made in E1.920 and E1.923.

Example 1—interaction between married couple's allowance and age-related personal allowances (2015/16 and prior tax years)

In 2014/15, George is aged 82 and has net adjusted income of £34,500. His wife, Mildred, is aged 63 and had income of £20,000 in that tax year. They got married in 1975 and have not made a joint election for the rules in ITA 2007, s 46 to apply, so George is the primary claimant for the married couple's allowance.

In 2014/15 the age-related personal allowance was £10,660, the basic personal allowance was £10,000, the maximum married couple's allowance was £8,165, the minimum married couple's allowance was £3,140 and the income limit was £27,000.

As George's income exceeded the income limit, his allowances needed to be reduced by half of the excess. The age-related personal allowance was reduced first and then any remaining abatement was used to reduce the married couple's allowance.

The total abatement was £3,750 ((£34,500 – £27,000) / 2). The age-related personal allowance was reduced first and then any remaining abatement was used to reduce the married couple's allowance. The age-related allowance could not be reduced to below the basic personal allowance. The married couple's allowance could not be reduced to below the minimum amount.

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