Married Tax Credit in Separation Case

[alaskaonline]

Good Friday everyone I need some quick opinions/ advise on the following matter.

If a couple separates and he used to use the Married Tax Credits (cause he worked full time and had bigger income) and she didn't cause she only worked two day a week part time and they now separate. What's the story? My understanding was that until the divorce proceedings begin they can stay on the tax credit agreement they had while living together? Is my understanding correct? If not please advise.

If it is correct, what's the story with the following situation: Separation agreement is currently being drawn up and without talking to the ex spouse she went to change her tax credits. (no one knows any exact details yet, she just told him via text that she changed the credits).
He hasn't heard anything from the Revenue yet so he is wondering is it legal for her to change a joint tax credit without his consent (I'm guessing the answer) and without a financial agreement in place yet. Obviously it jeopardizes the draft that is currently being discussed.

Thanks

 

[kennyb3]

http://www.citizensinformation.ie/e...edits_and_reliefs/sep_divorce_income_tax.html

this may help

Regards,

Brian

 

[alaskaonline]

Thanks Brian.

Can you explain the following:

There are a number of legal approaches for married couples who wish to separate and the Revenue Commissioners recognise that a couple may separate without any formal arrangements. In that case, the couple should contact Revenue after the actual separation, so that the necessary tax adjustments can be made for the year in which the couple separate and for the following tax years.

There is going to be a formal arrangement which is currently "in progress" with their solicitors. So their separation is "official" when they signed this agreement. That's what both have been told. In what way does that work now with the above text?

If you are the assessable spouse, you are entitled to the married person’s tax credit and double rate bands for the full year in which you separate. You are taxed on your own income for the full year as well as your spouse’s income for the year up until the date of separation.

Does that mean no matter what credits she applied for, he is still entitled to the full year until the separation is made official?

Thanks for any help on clarifying.

 

[huskerdu]

There is going to be a formal arrangement which is currently "in progress" with their solicitors. So their separation is "official" when they signed this agreement. That's what both have been told. In what way does that work now with the above text?



Does that mean no matter what credits she applied for, he is still entitled to the full year until the separation is made official?

Thanks for any help on clarifying.

Here is my understanding of the above statements.

THEY, as a couple are entitled to be taxed as a married couple in the year of separation. It is up to them how they split the tax credits between them. The Revenue don't care how you split them between you over the course of the year.

She has changed this split, which she is legally entitled to ask Revenue to do. Her tax credits had been assigned to her husband, and has asked for them to be reassigned to her.

Obviously, as you have already mentioned, this changes their net pay and therefore changes the monetary agreement being negotiated at the moment. He needs to check how this changes his net pay, and insist that this is taken into consideration in the maintenance being agreed.

 

[alaskaonline]

thanks huskerdu - your explaination makes sense. Would you know what happens to the tax credits if she went for One Parent instead of splitting the Married ones? There is a chance she went for OP instead of the option you stated.....