Scottish Marriage Allowance

[teuchter66]

Following on from the confusion caused to Scottish taxpayers by the introduction of additional income tax bands coupled with the further divergence of the Higher Rate 'thresholds', has anyone got a definitive answer to where the cut-off limit will fall for transfer of Marriage Allowance in 2018/2019.

The Scottish basic rate limit is currently frozen at £43,000 and the dividend/savings limit at the rUK basic rate threshold at £45,000 with the Marriage Allowance cut-off at £43,000.
For 2018/2019 the Scottish basic rate limit is £24,000, the additional rate limit is £43,430 and the dividend/savings limit at the rUK basic rate threshold is £46,350.
Guidance sets the Marriage Allowance criterion variously as 'Basic Rate taxpayer' or 'Not a Higher Rate taxpayer' so one or other definition will need to change for 2018/2019.

This matters to me because for the first time since its introduction I stand to lose the Marriage Allowance owing to age (no more pension contributions), foresight(dividends/interest already sheltered) and domicile(ever-widening gap between starting rate for higher rate tax in Scotland and rUK.

John

[DrBunsenHoneydew]

They needed to pass Westminster legislation to sort this mess out; so this has now changed the cut-off definition to the "Scottish Higher Rate Threshold", which will become £43,430.

[teuchter66]

Thanks for the clarification, I will indeed break that rate limit and become a Scottish Higher Rate taxpayer.

Glad to pay a little more for my country but compared to a similar rUK taxpayer saving £390 @ 20% (£78.00), my £70 saving thanks to Westminster will be matched with a charge of £1190 @ 41% (£488) for the loss of the Marriage Allowance alone, in addition to a rate of 41% on any earnings falling within the band between £43,430 and £46350.

HMRC are currently estimating that I will pay an additional £595 tax next year but I fear this will rise somewhat once my expected CPI increases are applied to my pensions.

I fear many Scottish taxpayers will get a shock when they open their April pay packets.

John

[StepOne]

I fear many Scottish taxpayers will get a shock when they open their April pay packets.John

I think most will be a bit better off, but a lot will take a hit as the workplace pension employee contributions go from 1% to 3% in April. Cynics might say it was an opportune moment to fiddle with Scottish Income Tax

StepOne