Tax Relief - Married / Single.

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deco87

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Hi
We are taxed as a married couple.
Both work.
I excess 45k she 20 k

Separating shortly , will both be then taxed as single people.

I was told that I will lose "30" a week and that she will gain "30" a week - from that point onwards. (mediation person mentioned it!)
Can anyone say is that correct? and secondly , is that "30" in euro or "30" in tax relief
I e...30 extra a week , minus the lower tax rate for her as that is the rate she pays.

Any advice/guidance appreciated. thank you
 
If you both agree, you could opt to be assessed as a married couple. The method of assessment that would apply in that case would be separate assessment. Briefly, what this means is that you would benefit from transfers of any unused rate bands from your ex at the end of the tax year.

As mentioned, you would both have to agree to this.
 
We are completely agreed. Very amicable.
That's no problem. I cannot follow it.
I just want to know in euros what this means. Thanks.
Obviously times are going to become very tight financially ( one kid 17) we want to minimise tax to be paid ..whatever way it can be done ( legally) Thks for quick reply
 
Did you have some of her tax credits all along? If you had and they are obviously going back to her that could account for your loss and her gain.
 
I must have had. She only back to work in last few months. All I know is that we are taxed as a married couple. I understand that is the most advantageous way for a couple to be taxed. We will be single for tax purposes in next few months when divorced. I rang the tax office and got very little help as regards unused credits ....I was just asked what way did I wish to be assessed. Thanks for advice anyway
 
Hello,

This link might help..


At a very very high level a married person with no children with your income will pay income tax, just looking at rate bands and not credits :

Husband €45k - €43,550 @20% anything over at 40%

Wife €20k - all at 20%.

Seperate treatment assuming no single parent..

Husband €45k - €34,550 @ 20%, balance at 40%. Worse off by €9,000 @20%= €1,800 or about €34 a week..

Wife- no change.

That really really draft !! Obviously I don’t know your circumstances, credits applicable, if maintenance is payable..

Maybe see a tax advisor too.. I think it would be worth it ...there can be lots of things to consider..


https://www.revenue.ie/en/life-even...ration-divorce-and-civil-annulment/index.aspx
 
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deco87 said:
I cannot follow it.
Click to expand...

When you separate you are treated as two single individuals.

If you pay maintenance to your ex under a legal deed, such as a Deed of Separation, Court Order, etc., you can opt to be treated as a married couple.

Since you are both working, you would be assessed under Separate Assessment.

What this means is that at the end of the year you may ask for your tax liability to be reviewed to obtain the benefit of the 20% tax rate unused by you ex.

Your ex earns €20,000 but the 20% rate band for single indivuals is €34,550. Therefore, you would be entitled to an additional €14,550 @ 20%, which your ex will not use.

This means a tax saving of €2,910 per annum, i.e. €14,550 @ (40%-20%).

I agree with the previous poster in that you should contact your tax office. They cannot advise you which way you should opt but they will explain the consequences of the various options and they have details of your tax credits.

If you can afford a tax advisor it would be better but I gather money is tight.
 
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Really grateful for all advice. Thanks .
One child 17. He will live with me majority of time , I think I get some relief back for that ...no maintenance agreement necessary as we are agreed we will share his expenses ..but in reality I will be covering them ...thanks
 
deco87 said:
...no maintenance agreement necessary as we are agreed we will share his expenses ..but in reality I will be covering them ...thanks
Click to expand...

That changes things.

Since there is no maintenance agreement you cannot apply for Separate Assessment and cannot benefit from transfers from your ex.

You would instead be entitled to the Single Person Child Carer Credit of 1,650 and an additional 4,000 to the 20% rate band, i.e. a tax saving of €2,050 per annum.

Just to clarify, you cannot claim both the Single Person Child Carer Credit and also Separate Assessment.
 
Fair play for all that info thank you.
Got the single parent allowance /perfect.

And. The additional 4000 to the 20% band...tax saving 2050..…would you have a link (revenue/etc) to that bit! By any chance ..I haven't come across that before from my googling! Thks again.
 
Sophrosyne said:
Just to clarify, you cannot claim both the Single Person Child Carer Credit and also Separate Assessment.
Click to expand...
Is this not the other way around? As in you cannot claim the SPCCC if you are jointly assessed, so you must be assessed separately in order to be able to claim it?
 
iamaspinner said:
Is this not the other way around? As in you cannot claim the SPCCC if you are jointly assessed, so you must be assessed separately in order to be able to claim it?
Click to expand...

You may be thinking of separate treatment rather than separate assessment.

Separate assessment is an option available to married couples and civil partners. It is similar to joint assessment except that transfers of unused reliefs and rate bands from one spouse to the other are applied by end-of-year review.

Under separate treatment however, spouses are treated as two single individuals who cannot benefit from inter spousal transfers.
 
Sophrosyne said:
You may be thinking of separate treatment rather than separate assessment.

Separate assessment is an option available to married couples and civil partners. It is similar to joint assessment except that transfers of unused reliefs and rate bands from one spouse to the other are applied by end-of-year review.

Under separate treatment however, spouses are treated as two single individuals who cannot benefit from inter spousal transfers.
Click to expand...

Yes, that what I was thinking! It didn't make much sense to me otherwise. You can only claim it if you are treated separately. That's my personal case too. Thanks for clarifying that, Sophrosyne.
 
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