Married Couple Tax

fionny

Hi All,

Hope you can help us understand, myself and my wife recently got married and are wondering if there is any benefits to playing around with tax credits when we can next year..

One of us is earning a considerable more then the other with a good chunk within the 40% tax rate. The other just barely peaks over the band.. would it benefit to transfer credits to the higher earner?

How does it work?

Thanks!

srsly78

Only benefits if one person is below the band.

Interesting stuff here: http://www.citizensinformation.ie/en/money_and_tax/tax/income_tax/taxation_of_married_people.html

New legislation seems to mean you can "claim the difference" even if not using joint assessment.

fionny

Can anyone explain why we would not come out better given:

Tax Bands:
Single, Widowed or a Surviving Civil Partner without qualifying children = €32,800 @ 20%, Balance @ 41%
Married or in a Civil Partnership - both Spouses or Civil Partners with income = €41,800 @ 20% (with an increase of €23,800 max), Balance @ 41%

I dont understand given that information why I cannot earn another 9k at 20%?

dbran

The person with the lower pay can indeed transfer the 9k of lower rate band to you and provided that they are not already using it, it will result in a saving.

If you are saying that she barely creeps over the lower rate band which I presume is €32800 so she is already using up all her lower rate band and therefore she cannot transfer it to you. There will be no saving

dbran

fionny

dbran wrote: »

The person with the lower pay can indeed transfer the 9k of lower rate band to you and provided that they are not already using it, it will result in a saving.

If you are saying that she barely creeps over the lower rate band which I presume is €32800 so she is already using up all her lower rate band and therefore she cannot transfer it to you. There will be no saving

dbran

Thanks, The 41,800 therefore gets lost in limbo and neither of us benefit so? Very confusing!

CIARAN_BOYLE

fionny wrote: »

Thanks, The 41,800 therefore gets lost in limbo and neither of us benefit so? Very confusing!

She can give you 9,000 of her band so that you would have 41,800 and she would have 238000.

If she is already over 32800 there is no benefit from your band going up 9,000 and hers going down 9,000.