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Personal Tax: How to Transfer Marriage Allowance

Article ID
personal-tax-how-to-transfer-marriage-allowance
Article Name
Personal Tax: How to Transfer Marriage Allowance
Created Date
6th August 2021
Product
Problem
IRIS Personal Tax: How to Transfer Marriage Allowance between partners. You can only claim this if the Transferor and the Receiver are within the income threshold set by HMRC:
Resolution
  1. Load the client who is transferring the allowance from (i.e partner giving away their allowance). If it’s a non client then go to step 6.
  2. Reliefs, Allowances, Married Couple, complete the ‘Marriages’ field.
  1. Surplus Allowance Transferred: ‘To Partner’
  2. Status: ‘Transferor’ (if you cannot select -switch to Manual Value)
  3. OK to save. On this clients Tax return page TR5, the bottom field will be completed.  

DO NOT TOUCH the ‘Married Couple’s Allowance’. This only applies to people born before April 1935. If you complete this accidently then it gives a wrong calculation on the receiver of the allowance.

  1. Load the client who is receiving the allowance
  2. Reliefs, Allowances, Married Couple, complete the ‘Marriages’ field. IF it’s a non client partner then create a non client.
  1. Surplus Allowance Transferred: ‘From Partner’
  2. Status: ‘Recipient’ (if you cannot select -switch to Manual Value). BUT if this option is ‘greyed’ out- see below.
  3. OK to save. NOTE: Tax return page TR5, the bottom field will not be completed as its only designed to show for the partner giving the allowance away.eg step 5.

DO NOT TOUCH the ‘Married Couple’s Allowance’. This only applies to people born before April 1935. If you complete this accidently then it gives a wrong calculation on the receiver of the allowance.

This allowance cannot be restricted in anyway – HMRC rules state you can claim all 100% or none at all.

If the Status option is greyed out: then follow these steps: Setup, HMRC data retrieval options, switch on all 5 boxes and OK, now back to marriage screen and you now can edit the status.

I have all the correct settings but the allowance will not show on tax comp – Basic rate tax payer: Check the basic rate band before personal allowances and note it down. If the ‘total income before Personal Allowance is more than this amount’ then the client is a higher rate taxpayer and will not be eligible for marriage allowance.

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