Tax allowance transfer between spouses

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dakra51

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My husband and I have opted for separate treatment for tax purposes and at the end of the tax year I have requested that my husband's unused standard rate allowance be transferred to me. I have received a tax refund for 2009 and 2010, but when I asked for a review this year I was told that as his standard rate band had been increased as a result of contribution to a pension, the unused allowance is not transferable to me.

Has anyone come across this before?
 
No we opted for separate treatment a few years ago. The problem seem to relate specifically to the allowance for pension contributions, which the say is not transferrable. If my husband did not have any pension contributions he would have used up all the standard band allowance himself, but it was increased due to the pension contributions.
 
Are you sure you don't mean separate assessment?


What is Separate Treatment?

Under Separate Treatment each spouse or civil partner is treated as a single person for tax purposes. Separate Treatment should not be confused with Separate Assessment.



Both spouses or civil partners:
  • Are taxed on their own income
  • Receive tax credits and the standard rate band due to a single person
  • Pay their own tax
  • Complete their own Return of Income form and claim their own tax credits. One spouse or civil partner cannot claim relief for payments made by the other and there is no right to transfer tax credits or standard rate band to each other.
 
Sorry I'm using the wrong term, in 2009 we opted for "separate assessment" and as I said earlier following end of year reviews in 2009 & 2010 I got a refund. I have definitely not requested any change in assessment type since then, but when I requested an end of year review for 2011 I got the following reply:

In the year 2011 your spouse Taxable Pay is greater then the Standard Rate Band threshold and this pay was reduced by an allowable deduction of Retirement Annuity Relief which would appear on the PAYE Balancing Statement your spouse has unused Standard Rate Band.

However this relief is non-transferable between spouses in line with existing rules for retirement annuity contracts (RACs) and occupational pension scheme contributions therefore there is no unused Standard Rate Band to be transferred.

If we were on joint assessment would I not automatically get the benefit of the increase in the standard rate band?
 
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