She can't use your income to boost her salary to claim tax relief at 40%.
When you put it like that it makes senseThanks for the reply
If your wife makes AVC contributions she will get tax relief at 20% in her wages.
The AVC contributions will effectively reduce your joint income by the amount contributed.
If your overall joint income is taxed at 40% on an amount greater than the AVC contribution,
then you will jointly save tax at 40% on the AVC.
Thats it exactly. Your joint taxable income is reduced by the AVC amount and you save tax at your marginal rate.
If you are taxed at 40% on an amount greater that the AVC amount, you will save tax at 40%. Submit a tax return at the end of the tax year and you will be due a refund.
Bstop you are sticking to your guns on this one!
The total is indeed €85,000 but there is only €15,000 for her at the standard rate he is still taxed on €41,800 at 20% and €28,200 at 40% under both assessments.
I will only get relief of about 20% but that will get taken from the tax man at the other end as I understand it.
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