Marginal Tax credit

D

dewdrop

Registered User
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I have been trying to understand this relief but have failed as i must be overlooking some aspect. In my balancing statement for 2010 our total income including DSFA pension came to 76800 euros and we were allowed marginal relief of 1022. I thought this applied only when one was slightly over the exemption thresehold of 36ooo..in another section dealing with tax there is a reference that it applies if income is less than double the exemption figure. I am just afraid revenue might be looking for money back and any clarification would be much appreciated.
 
Any use - under Marginal Relief heading:

http://www.citizensinformation.ie/en/money_and_tax/tax/income_tax/how_your_tax_is_calculated.html

Marginal relief

If your income exceeds the limits for low income exemption, but is less than twice the amount of the limit then you can claim marginal relief. Under marginal relief, you are taxed only on the amount by which your income exceeds the limit, but a special tax rate of 40% applies to this amount.
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Also:

http://www.revenue.ie/en/tax/it/leaflets/it8.html#section4

You might want to post some more detailed figures for people to comment on.
 
Thanks Clubman. our income was charged as follows 45400 @ 20% and 31445 @ 41% making a total of 21972 tax due. Tax deducted was 16239 and tax credits came to 7234 which included marginal relief credit of 1022 leading to a refund of 1501.
 
dewdrop said:
Thanks Clubman. our income was charged as follows 45400 @ 20% and 31445 @ 41% making a total of 21972 tax due. Tax deducted was 16239 and tax credits came to 7234 which included marginal relief credit of 1022 leading to a refund of 1501.
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Interesting... I can't figure it out! I'd be inclined to say, maybe it's a different credit that has been misclassified as marginal relief on the P21. By definition it can't be marginal relief, and I doubt the software would allow marginal relief where the income is more than double the threshold. The calculation doesn't stand up anyway - even if you ignore the "double the threshold" rule.

Your tax credits seem unusual as well, are you not both in receipt of, or entitled to, a full PAYE credit?
 
Thanks. the figures i am quoting are from a Paye Balancing Statement for 2010. Tax credits were 1022 marginal relief; 3660 personal tax cr; PAYE tax credit 1830 ; age tax credit 650 and service charges 72 making a total of 7234. The PAYE tax credit is that what applied in 2010. does a single person and a joint couple get the same figure for the paye tax credit? I think i might leave the whole matter rest and thanks for comments
 
Oh wait, the fog has cleared and it all suddenly makes sense!

The balancing statement is entirely correct.

I was calculating the marginal relief using the 2011 threshold of 36k.

In 2010 the threshold was 40k.

Under marginal relief the tax payable for 2010 is:

(Income) 76,845 - (Threshold) 40,000 = 36,845
@ marginal rate 40% = 14,738

Your liability ignoring exemption would be 15,760

Therefore your marginal relief is 1,022.

So everything is spot on. :)
 
Hi Mandetrot you are a star!.this matter had been bugging me in that i had a fear that revenue had made a mistake and might be looking for money back. No doubt present furore re pensioners did not help. So much so i decided to get up from the bed at 1 am to have another look and luckily before looking at the figures i check AAM and there as lucid as could be was your detailed explanation. I am deeply appreciative. While the aInformation website is very helpful it does say somewhere that marginal relief applies "where your income is not much above" the exemption figure and this statement confused me. As a matter of interest does Revenue automatically apply this Marginal relief when one reaches the relative age. Time for sleep and thanks again. I should have said "Citizens Information website.
 
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