State pensioners could boost tax-free income to £21,330 using two HMRC rules

State pensioners could increase the amount of income they receive tax-free to as much as £21,330 by using two lesser-known HM Revenue and Customs (HMRC) rules. It comes as more retirees face paying income tax.The Personal Allowance remains frozen at £12,570 and is set to stay at that level until at least 2031, meaning it will have remained unchanged for a decade.Meanwhile, the state pension continues to rise under the triple lock, bringing it increasingly close to the income tax threshold. TRENDING Stories Videos Your Say During the current tax year, the full new state pension is worth £12,548.90 a year, leaving it just £21.10 below the £12,570 Personal Allowance.That means pensioners who receive additional income from private pensions, employment, annuities or savings could find themselves paying income tax once their total income exceeds the threshold.Eligible pensioners may, however, be able to increase the amount they receive tax-free by using both Marriage Allowance and the Rent-a-Room scheme.Marriage Allowance is available to married couples and civil partners where one partner earns less than the Personal Allowance and the other pays income tax at the basic rate.This can apply to some retired couples where one person relies on a lower income while the other continues to work or receives a larger taxable pension.Under the scheme, the lower-earning partner can transfer £1,260 of their Personal Allowance to their spouse or civil partner, increasing the recipient's tax-free allowance to £13,830.The tax saving is worth up to £252 a year for eligible couples, and claims can also be backdated for up to four tax years if the eligibility criteria were met during that period.HMRC states: Marriage Allowance lets you transfer £1,260 of your Personal Allowance to your husband, wife or civil partner.The tax authority also confirms that receiving a pension does not affect eligibility to apply for Marriage Allowance.LATEST DEVELOPMENTSCouncil tax crisis as British households trapped in £7.4billion debt black holeMorrisons issues major update to customers after store closures announcement - full listNet zero drive continues as two major solar farms approved by LabourThe Rent-a-Room scheme offers another tax relief for homeowners who let furnished accommodation in the home they live in.Under the scheme, eligible homeowners can receive up to £7,500 a year in rental income without paying tax on that income.The relief applies only to rooms in a property that is the individual's main residence and cannot be used for buy-to-let properties.Those who need to complete a self-assessment tax return must declare the rental income, but provided it does not exceed the £7,500 threshold, the income remains exempt from tax.When combined, the two HMRC schemes could allow some eligible pensioners to receive up to £21,330 tax-free.That total is made up of the £12,570 Personal Allowance, a further £1,260 transferred through Marriage Allowance and up to £7,500 of tax-free rental income under the Rent-a-Room scheme.Marriage Allowance must be claimed through HMRC, while those using the Rent-a-Room scheme may need to complete a self-assessment tax return depending on their circumstances.The rules are becoming increasingly relevant as annual increases to the state pension continue to narrow the gap between pension payments and the frozen Personal Allowance.Following November's Budget, Chancellor Rachel Reeves confirmed that pensioners whose only income is the state pension will not pay income tax when the full new state pension rises above the Personal Allowance from April 2027.However, pensioners with additional taxable income beyond the state pension may still have an income tax liability if their total income exceeds the relevant thresholds, making reliefs such as Marriage Allowance and the Rent-a-Room scheme potentially beneficial for those who are eligible. Our Standards: The GB News Editorial Charter