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Redundancy & tax free allowances

  • 14-08-2014 9:58am
    #1
    naughtysmurf
    Registered Users, Registered Users 2 Posts: 3,291 ✭✭✭


    Just a quick question, what's the best or right thing to do here, married couple both working, one of them gets made redundant & receives a lump sum so not currently working, should the other person then claim the maximum allowances for the remainder of the year (the allowances the other person had while working) after the redundancy payment goes through? or is there any negative aspect to this from a taxation perspective

    Thanks


Comments

  • #2
    Mr. Incognito
    Registered Users, Registered Users 2 Posts: 9,798 ✭✭✭Mr. Incognito


    I am confused as to what the question is.

    What is the best way to treat a tax free lump sum for tax purposes?

    It's tax free. What is there to treat.

    If you have an excess that is not tax free you pay tax on it. If you are jointly assessed that's the maximum you can claim.

    There is no element of tax planning in place here. Even if it is taxable and you are off work for a while you can get a balancing statement next year to claim unutilised credits


  • #3
    naughtysmurf
    Registered Users, Registered Users 2 Posts: 3,291 ✭✭✭naughtysmurf


    Maybe didn't explain very well, simply, I get made redundant, get say 100K & decide not to work for the rest of the year

    Should I transfer my allocated monthly tax free allowances (the allowances that I had been using while working up to being made redundant) to my wife for the remainder of the year so she gets the benefit of them?


  • #4
    Mr. Incognito
    Registered Users, Registered Users 2 Posts: 9,798 ✭✭✭Mr. Incognito


    Are you jointly assessed?

    If so nothing to transfer. You are assessed as a couple.

    Are you separately assessed? If so then no mechanism to transfer.


  • #5
    naughtysmurf
    Registered Users, Registered Users 2 Posts: 3,291 ✭✭✭naughtysmurf


    Mr. Incognito wrote: »
    Are you jointly assessed?

    If so nothing to transfer. You are assessed as a couple.

    Are you separately assessed? If so then no mechanism to transfer.

    We are assessed as a married couple yes but on paye anytime you can allocate these allowances (up to a point) 70/30, 60/40 or anyway that suits us when we are both working.

    Are you saying that all the allowances that a married couple get jointly when both working will automatically transfer to the remaining worker after the redundancy of one of them or do you have to contact revenue to ensure the remaining worker receives all the allowances because obviously this will affect their take home pay


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