Romantic Tax Question

dvdfan

I earn 50k base plus around 10k in shares and bonuses per year so circa 60k total. My girlfriend earns around 12k per year and pretty sure she pays zero tax. Ignoring any CGT since I normally sell when they vest, what savings would we make if we were married? If its relevant we have 2 kids and live together. Or what is the formula to work out the savings and I can take a go?

XsApollo

You would get a tax credit from her, I think it’s around 1700, you also get a rate band increase ( the point at which you start paying 40% tax) from around 37000 to around 44,500.

numbers are from memory so give or take.

ari101

The movement in the band is up to 9k which would translate to 1800 euro a year saving. With regards to the credits, at 12k she is using part of the 1700 transferrable credit to have a 0 tax situation. You could move circa 1,000 to you and still have her pay no tax. So at a basic level you would save ~2,800 a year.

P.S. morbid very unromantic part... If anything happens to either of ye (may it be a long life away) and ye have assets worth something to leave behind it would save a lot of inheritance tax for a spouse vs. unmarried partner.

namenotavailablE

For this type of query, the free 'Allocate standard rate band' spreadsheet (this computes how much of each spouse's income is charged tax at 20%) at my webpage can assist: https://taxcalc.eu/monthlyss

For the figures given in the OP, it indicates €45800 standard band to the higher earner and €12000 to the lower earner.