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Tax Question - Cut Off Points

  • 08-03-2012 10:25pm
    #1
    liamg67
    Registered Users, Registered Users 2 Posts: 42 ✭


    Hi

    I wonder if someone can advise on the following tax question please?

    On my tax credit notification for 2012 it says I have a combined Tax Rate Band of EU65,600 for myself and my wife. It states that the amount of income below this will be taxable at 20% and above 41%.

    If I earned EU50K and my wife EU10K should I be paying any upper rate tax please. (not exact figures). If not how to I get this changed as at the moment I have a cut off of EU40,910 and my wife EU24,691.

    Thanks
    Liam


Comments

  • #2
    barneystinson
    Registered Users, Registered Users 2 Posts: 4,685 ✭✭✭barneystinson


    liamg67 wrote: »
    Hi

    I wonder if someone can advise on the following tax question please?

    On my tax credit notification for 2012 it says I have a combined Tax Rate Band of EU65,600 for myself and my wife. It states that the amount of income below this will be taxable at 20% and above 41%.

    If I earned EU50K and my wife EU10K should I be paying any upper rate tax please. (not exact figures). If not how to I get this changed as at the moment I have a cut off of EU40,910 and my wife EU24,691.

    Thanks
    Liam

    The 65,600 is initially made up of 32,800 for each spouse. A maximum of 9,000 can be transferred betwenn the spouses.

    If as in your example one spouse earns 50k and the other 10k, the optimum position is to have the higher earning spouse have the maximum Rate Band of 41,800 and the other spouse (who only needs 10k) would have the remainder of 23,800.

    In your case you could transfer a further €890 from her to you, to bring you up to 41,800 and reduce her to 23,201 (not sure how/why there's €1 extra!).


  • #3
    liamg67
    Registered Users, Registered Users 2 Posts: 42 ✭liamg67


    barneystinson wrote: »
    The 65,600 is initially made up of 32,800 for each spouse. A maximum of 9,000 can be transferred betwenn the spouses.

    If as in your example one spouse earns 50k and the other 10k, the optimum position is to have the higher earning spouse have the maximum Rate Band of 41,800 and the other spouse (who only needs 10k) would have the remainder of 23,800.

    In your case you could transfer a further €890 from her to you, to bring you up to 41,800 and reduce her to 23,201 (not sure how/why there's €1 extra!).

    Thanks for this information - I thought it was something like this - but wasn't clear on the websites I visited. Thanks again - appreciate your help.


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