Married - 2 incomes and standard rate cut off question

[fmul9798]

Hi,

I find the documentation a little confusing on this topic, so I apologies if this is a ridiculously simple question.

My spouse is a PAYE worker and I am self-employed. I have a question regarding standard rate cutoff.

We are assessed as a married couple. If my spouse only earned 35000 last year, would we be entitled to use the rest of the unused standard rate cutoff to allocate against our 2nd income (my self-employed income)?

Example:
Married standard rate cutoff : 45400
Extra SRCOP for 2nd income: 27400

As our combined incomes are above the 72800 mark, if my spouse earned only 35000, can we then allocate the remaining 37800 SRCOP to the 2nd income (i.e. the self-employed income)?

I plan to ring tax office, but was hopinh I could get some feedback here first, as it may trigger more questions or alternative routes for conversations with the Revenue office.

Thanks in advance
-fm

 

[davidoco]

We are assessed as a married couple. If my spouse only earned 35000 last year, would we be entitled to use the rest of the unused standard rate cutoff to allocate against our 2nd income (my self-employed income)?

It's a little less confusing if you treat the PAYE as the 2nd income which in fact would be the case as the self employed earner is the assessable spouse but that's another days work.

Back to your question. A self employed married persons income will be taxable at 20% on the first 72800 and 41% on the remainder. Of that 72,800 the assessable spouse can transfer a maximum standard rate cut off of 45400 to spouse, therefore you will be allocating 35,000 to cover spouses income and you have the rest for yourself (72800 - 35000). So YES.