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Personal Allowance Transfer

Article ID
ias-12272
Article Name
Personal Allowance Transfer
Created Date
20th April 2016
Product
IRIS Personal Tax
Problem
From 2016 clients have the option to transfer 10% of their Personal Allowances to their spouse but are unsure how to carry this out.
Resolution
The following are the steps that need to be carried out:- The husband and wife need to contact the hmrc to request that this transfer is carried out. To do this they need to go to the HMRC web site and search for Married Couples Allowance and they will be given this option. There will be certain criteria that the clients will need to have before they start the application. 1. The marriage has to be set up. 2. The date of birth needs to be entered for both the husband and the wife. 3. Within the person that is transferring the allowance: a. Go to Reliefs/Allowance/Married Couples – Allocation and Transfer. b. Ensure that the marriage is showing in the top box. c. In the next box down choose To Partner. d. Tick the last box in the screen under Marriage Allowance and opposite Transfer surplus personal allowance. e. This can only be carried out if the person concerned is not utilising 10% of the personal allowance (£1,060) and neither spouse is liable to income above the basic rate. f. On the computation the Personal Allowances will be reduced. g. On the return there will be an entry at the bottom of TR5 to show the spouse that the personal allowance is being transferred to. 4. Within the person that is receiving the allowance. a. Go to Reliefs/Allowances/Married Couple – Allocation and Transfer. b. Ensure that the Marriage is showing. c. In the next box it should show From Partner. d. The last box should be changed to show recipient. e. When running the computation the amount will show under the tax deducted i.e. £1,060 @ 20% = £212. f. As long as the version that you are running is 16.3 then the transfer will be taken into account where the amount of tax is concerned and will also be included in the payments on account..

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