Married Couples Allowance

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System
System Posts: 100,534 🤖 Admin 🤖
edited June 18 in General member discussion
Could someone please explain how this is calculated based on 2005-06 allowance which I believe is £5694?
Income for year is £26417 gross.
I am trying to work out on the basis that if income is over £19500 the allowance is reduced by £1 for every £2 of income that exceeds the limit.
Do I need to deduct personal allowance first before making the calculation?

Head is very muddled and slow after a week's holiday :?

Any help is much appreciated?

Sharon

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  • System
    System Posts: 100,534 🤖 Admin 🤖
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    Re:Married Couples Allowance

    You would deduct the personal allowance before applying the MCA as you have to work out the tax due on the taxable income and then apply the MCA.

    There is an example at:

    http://www.hmrc.gov.uk/taxback/example51.htm




    Kind regards
    Steve
  • System
    System Posts: 100,534 🤖 Admin 🤖
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    Re:Married Couples Allowance

    Many thanks for the link Steve.
    That's great, must remember in future not to have a holiday as brain has gone into hibernation :lol:

    Sharon
  • System
    System Posts: 100,534 🤖 Admin 🤖
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    Re:Married Couples Allowance

    Remember the age-related personal allowance has to be abated before the MCA is also abated and calculated.

    The HMRC example does not have sufficient income to demonstrate this.

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