Increasing tax credits between married couple

bullyakeen

Hi All,

I've read many threads on this situation but cannot seem to find exactly what i'm looking for.

I earn more than my wife and want to make sure we are sharing our credits as effeciently as possible se we can maximise our take home pay. We are both allocated 3,300 credits each and they are split evenly.

Eg - if my wife earns 30k and I earned 45k , how can I work out how much extra credits can be applied to myself. I know how to make the change on the revenue website (increasing my credits / decreasing spouses credits) but I want to make sure I dont make a mess of things first.

Any comments much appreciated...

Daxve

In this case it makes no difference. You are both allocated half the married credit each €1,650 (€3,300/2) plus you each have your own PAYE credit of €1,650 so you both get €3,300 credit each. The married credit can be split however you like but the PAYE credits belong to one person only they can't be transferred to the other.

That means you can earn €16,500 a year before paying tax (€3,300 x 5). As both you and your wife earn over this you have no unused credits to transfer to the other so there is no benefit in transferring tax credits you end up paying the same regardless.

For the rate band the maximum you can have as married person is €41,800 your spouse is entitled to additional €23,800. You can give your spouse part of your rate band to bring hers up to €30,000 and yours down to €35,600 but you can't take part of your spouse's as you cannot exceed a maximum of €41,800.

Leave the credits as they are at €3,300 each and allocate €30,000 of the rate band to your spouse so she only pays tax at 20% and allocate €35,600 to yourself - you will pay 41% on anything above this. If your spouse's rate band is below €30,000 she will pay some tax at 41% but you will pay less at 41% and more at the 20% rate it all balances out there is no net difference.

Be aware that altering tax credits or rate bands at this point in the year may give rise to a tax underpayment for one spouse and a tax overpayment for the other next time you get paid. One will owe more tax which will be taken out of their wages and one will have overpaid so they will receive a refund of tax with their wages - again same net difference in the long run.

manu01

Hi,

I have the same question...I was working part-time (22K) and my husband full time at 43K. Currently our tax rate bands are 23.800 for me and 41.800 for him.
Now I got a new job (36-37K) and my husband 43K. What is the best thing to do for both of us pay less tax?

Thanks a lot!

Benny122

Hi there can anyone give me some advice please.

I'm not married and employed full time my salary is 29500k per annum.

My partner is unemployed and on Social Welfare.

If we married what would that mean to his payments and to my salary?

otterj

Your tacx credits will increase by 1650 if married so 1650 (if you get a paye credit) +3300= €4950