Model Marriage Allowance as the statutory s.55B transfer and Step 6 reduction

.github/test_outcome_allowlist.toml

@@ -19,12 +19,6 @@
 # Keep entries narrow. An entry that matches nothing in a run is reported as a
 # warning; remove it once its bug is fixed. Failures can never be accepted.
 
-[[allow]]
-nodeid = "policyengine_uk/tests/test_uc_state_pension_properties.py::test_state_pension_does_not_change_partners_marriage_allowance"
-outcome = "xfailed"
-reason = "#1947"
-why = "Known bug #1947 (Marriage Allowance booked on the recipient), pinned by a strict xfail until it is fixed."
-
 [[allow]]
 nodeid = "policyengine_uk/tests/test_build_metadata.py::test_runtime_metadata_uses_bundle_contract_when_available"
 outcome = "skipped"

.github/workflows/test-suite.yaml

@@ -4,10 +4,10 @@
 # publish. All three run the same jobs in the same locked environment.
 #
 # Jobs: the YAML policy tests (which also list every Python test), the Python
-# tests split over five runners, and Result, which fails unless every listed
+# tests split over eight runners, and Result, which fails unless every listed
 # Python test ran in exactly one shard and passed, apart from the outcomes
 # accepted in .github/test_outcome_allowlist.toml. A caller that names its job
-# Test gets the checks "Test / YAML", "Test / Python K/5" and "Test / Result";
+# Test gets the checks "Test / YAML", "Test / Python K/8" and "Test / Result";
 # "Test / Result" is the one to require.
 
 name: Test suite
@@ -133,12 +133,14 @@ jobs:
     runs-on: ubuntu-24.04-arm
     # The shards took 15, 20 and 15 minutes on 10 October (run
     # 38085920460), and up to 52 minutes with four shards on 21 October.
+    # Eight, not five: both source and wheel jobs on #1963 exceeded an hour
+    # with five shards. Keep the same limit and every-ID coverage audit.
     # 60 minutes leaves room for a slow runner and still stops a hung shard.
     timeout-minutes: 60
     strategy:
       fail-fast: false
       matrix:
-        shard: [1, 2, 3, 4, 5]
+        shard: [1, 2, 3, 4, 5, 6, 7, 8]
     steps:
       - name: Checkout repo
         uses: actions/checkout@v6

changelog.d/1947.fixed.md

@@ -0,0 +1 @@
+- Model Marriage Allowance as ITA 2007 ss. 55A-55E provide: the electing spouse gives up the fixed transferable amount from their own personal allowance and the other spouse gets a Step 6 tax reduction of the basic (or Scottish basic) rate times that amount, instead of the recipient's taxable income falling by the transferor's unused allowance.

changelog.d/1963.fixed.md

@@ -0,0 +1 @@
+- Made counted-once guard failures show only validated public diagnostics and increased source and wheel test shards after one-hour timeouts.

docs/engineering/skills/testing.md

@@ -86,10 +86,10 @@ the same suite,
 tree; a release tests the wheel it is about to publish, installed on its own.
 
 The suite runs the YAML policy tests in one job and splits the Python tests
-over five runners. Each runner runs one shard:
+over eight runners. Each runner runs one shard:
 
 ```bash
-pytest policyengine_uk/tests -n 4 --dist worksteal --shard K/5 -o xfail_strict=true
+pytest policyengine_uk/tests -n 4 --dist worksteal --shard K/8 -o xfail_strict=true
 ```
 
 `--shard K/N` is defined in `policyengine_uk/tests/conftest.py`. It keeps the

policyengine_uk/data/fiscal_partition.yaml

@@ -213,6 +213,10 @@ tax_heads:
     payer: household
     totals: [gov_tax, household_tax, pre_budget_change_household_tax]
     sign: nonnegative
+    reads:
+      - head: income_tax
+        route: capital_gains_tax -> allowances -> personal_allowance -> marriage_allowance_relinquished -> makes_marriage_allowance_election -> (private counterfactual) income_tax
+        why: the election determines personal allowance and the income occupying CGT rate bands; income tax is compared to choose the election, not included in capital gains tax
   - id: student_loan_repayments
     label: Student loan repayments
     variable: student_loan_repayments
@@ -675,7 +679,7 @@ overlap_guards:
       here as well.
   - id: eligibility_reads
     kind: read_not_inclusion
-    heads: [tv_licence, private_school_vat]
+    heads: [tv_licence, private_school_vat, capital_gains_tax]
     property: >-
       These heads reach other heads of the same total only through
       eligibility or imputation (see each head's reads). Raising the other

policyengine_uk/parameters/gov/hmrc/income_tax/allowances/marriage_allowance/fixed_amount.yaml

@@ -0,0 +1,10 @@
+description: Transferable amount where the Act fixes it in pounds rather than as a share of the personal allowance. For 2015-16 it is £1,060 (ITA 2007 s. 55B(4)(a)); from 2016-17 the amount is the share of the personal allowance in `max`, so this is zero.
+values:
+  2015-04-06: 1_060
+  2016-04-06: 0
+metadata:
+  unit: currency-GBP
+  label: Marriage Allowance fixed transferable amount
+  reference:
+    - title: Income Tax Act 2007 s. 55B(4)(a)
+      href: https://www.legislation.gov.uk/ukpga/2007/3/section/55B

policyengine_uk/parameters/gov/hmrc/income_tax/allowances/marriage_allowance/max.yaml

@@ -1,9 +1,9 @@
-description: Maximum Marriage Allowance taxable income reduction, as a percentage of the full Personal Allowance.
+description: Marriage Allowance transferable amount, as a share of the personal allowance in ITA 2007 s. 35(1). For 2015-16 the Act fixes the amount at £1,060, which is 10% of that year's £10,600 allowance.
 values:
-  2016-04-01: 0.1
+  2015-04-06: 0.1
 metadata:
   unit: /1
-  label: Marriage Allowance maximum percentage
+  label: Marriage Allowance transferable share of the personal allowance
   reference:
-    - title: Income Tax Act 2007 s. 55B(4)(b)
-      href: https://www.legislation.gov.uk/ukpga/2007/3/part/3/chapter/3A
+    - title: Income Tax Act 2007 s. 55B(4)
+      href: https://www.legislation.gov.uk/ukpga/2007/3/section/55B

policyengine_uk/parameters/gov/hmrc/income_tax/allowances/marriage_allowance/rounding_increment.yaml

@@ -1,9 +1,9 @@
-description: The Marriage Allowance is rounded up by this increment.
+description: The Marriage Allowance transferable amount is rounded up to a multiple of this amount.
 values:
   2016-04-01: 10
 metadata:
   unit: currency-GBP
   label: Marriage Allowance rounding increment
   reference:
     - title: Income Tax Act 2007 s. 55B(5)
-      href: https://www.legislation.gov.uk/ukpga/2007/3/part/3/chapter/3A
+      href: https://www.legislation.gov.uk/ukpga/2007/3/section/55B

policyengine_uk/parameters/gov/hmrc/income_tax/earned_taxable_income_exclusions.yaml

@@ -5,7 +5,6 @@ values:
     - taxable_dividend_income
     - taxable_property_income
     - received_allowances_earned_income
-    - marriage_allowance
 
 metadata:
   unit: list

policyengine_uk/parameters/gov/hmrc/income_tax/income_tax_subtractions.yaml

@@ -12,3 +12,4 @@ values:
   - capped_mcad
   - other_tax_credits
   - property_finance_cost_relief
+  - marriage_allowance_tax_reduction

policyengine_uk/reforms/cps/marriage_tax_reforms.py

@@ -1,12 +1,16 @@
 from policyengine_uk.model_api import *
 from policyengine_uk.utils.income_tax import net_income_from_adjusted_net_income
 from policyengine_uk.utils.supplied_inputs import supplied_input
+from policyengine_uk.variables.gov.hmrc.income_tax.allowances.meets_marriage_allowance_income_conditions import (
+    liable_only_at_marriage_allowance_rates,
+)
 from typing import Union, Optional
 
 
 def create_expanded_ma_reform(
     max_child_age: Optional[int] = None,
     child_education_levels: Optional[List[str]] = None,
+    remove_income_condition: bool = True,
 ) -> Reform:
     class meets_expanded_ma_conditions(Variable):
         label = "Qualifies for an expanded Marriage Allowance"
@@ -34,70 +38,60 @@ def formula(person, period):
 
     class meets_marriage_allowance_income_conditions(Variable):
         label = "Meets Marriage Allowance income conditions"
-        documentation = "Whether this person (and their partner) meets the conditions for this person to be eligible for the Marriage Allowance, as set out in the Income Tax Act 2007 sections 55B and 55C"
+        documentation = (
+            "Whether this person pays income tax only at the rates that allow "
+            "a Marriage Allowance election, or meets the reform's expansion "
+            "conditions, which lift that restriction."
+        )
         entity = Person
         definition_period = YEAR
         value_type = bool
         reference = "https://www.legislation.gov.uk/ukpga/2007/3/section/55B"
 
         def formula(person, period, parameters):
-            band = person("tax_band", period)
-            eligible_bands = parameters(
-                period
-            ).gov.hmrc.income_tax.allowances.marriage_allowance.eligible_bands
-            base_eligible = np.isin(band.decode_to_str(), eligible_bands)
-            # Expand to higher bands if the reform's expansion conditions are met.
-            bands = band.possible_values
-            expansion = person("meets_expanded_ma_conditions", period) & (
-                (band == bands.HIGHER) | (band == bands.ADDITIONAL)
+            conditions = liable_only_at_marriage_allowance_rates(
+                person, period, parameters
             )
-            return base_eligible | expansion
+            if not remove_income_condition:
+                return conditions
+            return conditions | person("meets_expanded_ma_conditions", period)
 
-    class marriage_allowance(Variable):
+    class marriage_allowance_transferable_amount(Variable):
         value_type = float
         entity = Person
-        label = "Marriage Allowance"
+        label = "Marriage Allowance transferable amount"
+        documentation = (
+            "The share of the personal allowance a Marriage Allowance election "
+            "transfers, at the reform's rate for couples meeting its expansion "
+            "conditions, rounded up to the rounding increment."
+        )
         definition_period = YEAR
-        reference = "https://www.legislation.gov.uk/ukpga/2007/3/part/3/chapter/3A"
+        reference = "https://www.legislation.gov.uk/ukpga/2007/3/section/55B"
         unit = GBP
 
         def formula(person, period, parameters):
-            marital = person("marital_status", period)
-            married = marital == marital.possible_values.MARRIED
-            eligible = (
-                married
-                & person("is_claimant_or_partner", period)
-                & person("meets_marriage_allowance_income_conditions", period)
-            )
-            transferable_amount = person("partners_unused_personal_allowance", period)
-            allowances = parameters(period).gov.hmrc.income_tax.allowances
-            capped_percentage = allowances.marriage_allowance.max
-            expanded_ma_cap = parameters(
-                period
-            ).gov.contrib.cps.marriage_tax_reforms.expanded_ma.ma_rate
-            capped_percentage = where(
+            p = parameters(period)
+            allowances = p.gov.hmrc.income_tax.allowances
+            share = where(
                 person("meets_expanded_ma_conditions", period),
-                expanded_ma_cap,
-                capped_percentage,
-            )
-            max_amount = allowances.personal_allowance.amount * capped_percentage
-            amount_if_eligible_pre_rounding = max_(
-                min_(transferable_amount, max_amount), 0
-            )
-            # Round up.
-            rounding_increment = allowances.marriage_allowance.rounding_increment
-            amount_if_eligible = (
-                np.ceil(amount_if_eligible_pre_rounding / rounding_increment)
-                * rounding_increment
+                p.gov.contrib.cps.marriage_tax_reforms.expanded_ma.ma_rate,
+                allowances.marriage_allowance.max,
             )
-            takes_up = person("would_claim_marriage_allowance", period)
-            return eligible * amount_if_eligible * takes_up
+            amount = allowances.personal_allowance.amount * share
+            increment = allowances.marriage_allowance.rounding_increment
+            rounded = np.ceil(amount / increment) * increment
+            # 2015-16 is a fixed amount (ITA 2007 s. 55B(4)(a)) unless the
+            # reform's expansion applies.
+            fixed = allowances.marriage_allowance.fixed_amount
+            if fixed == 0:
+                return rounded
+            return where(person("meets_expanded_ma_conditions", period), rounded, fixed)
 
     class reform(Reform):
         def apply(self):
             self.add_variable(meets_expanded_ma_conditions)
             self.update_variable(meets_marriage_allowance_income_conditions)
-            self.update_variable(marriage_allowance)
+            self.update_variable(marriage_allowance_transferable_amount)
 
     return reform
 
@@ -228,6 +222,7 @@ def create_marriage_tax_reform(parameters, period):
     if remove_income_condition or rate != original_rate:
         ma_reform = create_expanded_ma_reform(
             max_child_age=ma_max_child_age if ma_max_child_age > 0 else None,
+            remove_income_condition=bool(remove_income_condition),
         )
     else:
         ma_reform = None
@@ -254,4 +249,5 @@ def create_marriage_tax_reform(parameters, period):
 # These build the reform classes with no child-age / education conditions, so the reform
 # applies to every married couple regardless of child presence.
 expanded_ma_reform = create_expanded_ma_reform()
+expanded_ma_reform_rate_only = create_expanded_ma_reform(remove_income_condition=False)
 marriage_neutral_it_reform = create_marriage_neutral_income_tax_reform()

policyengine_uk/tests/aggregate_impact/test_aggregate_impact_certified.py

@@ -9,7 +9,10 @@
 import numpy as np
 import pytest
 
-from policyengine_uk.utils.aggregate_impact.measure import measure
+from policyengine_uk.utils.aggregate_impact.measure import (
+    component_guard_diagnostic,
+    measure,
+)
 from policyengine_uk.utils.aggregate_impact.partition import (
     default_partition_path,
     load_partition,
@@ -86,7 +89,7 @@ def test_every_tax_component_is_counted_exactly_once(measured):
     rows = {r["variable"]: r for r in guard["components"]}
     for head in partition.tax_heads:
         row = rows[head.variable]
-        assert row["status"] == "pass", row
+        assert row["status"] == "pass", component_guard_diagnostic(row, partition)
         for total, k in row["coefficients"].items():
             assert k == pytest.approx(1, abs=1e-3), (head.id, total)