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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA TX-UK Exams › TRANSFER OF PERSONAL ALLOWANCE
Hi Sir,
If a transferee spouse is a basic rate taxpayer and has only dividend income, when receiving the marriage allowance of £1250 from the transferor , its tax liability will be reduced by :
(a) 1250×20% = £250
OR
(b)1250×7.5% =£93.75
The tax credit will be at basic rate and equal to £250 – but remember it cannot create a tax repayment