Married couple, no kids, no mortgage, no debt. Both 52. We want to maximise the tax effectiveness of pension contributions for the lower earner.
Spouse A - €60,000 per year PAYE plus minor investment and rental income.
Spouse B - €38,000 per year PAYE plus around €3000 rental income but this varies depending on e.g. repairs/voids etc.
Both submit Form 11s - if that is relevant.
Spouse B is a member of the company DC scheme but does not make any AVCs at the moment. We want to max this out to the 30% maximum (€10,500 per year) and ideally to do this through payroll deductions rather than end-of-year.
Step 1: select joint assessment and ensure all available tax credits transferred from spouse B to spouse A. So then for 2024 Spouse A pays 20% up to €51,000 and 40% above this, while Spouse B pays 40% above €33,000. I assume this is the correct thing to do?
Step 2: How do we set it up so that the maximum possible amount of the PAYE is charged at 40%? I assume we need to do something with the tax credits? What we don't want is for the PAYE to be taxed and therefore tax-relieved at 20% through payroll and then the rental income (which is not eligible for pension relief) to be taxed at 40% at year end - we want it to be considered the other way round.
I hope that is clear, it is a bit complicated to explain. In a nutshell though, what we want to do is to maximise the amount of pension relief at 40% rather than 20% and are not sure how to do this. Thank you
Spouse A - €60,000 per year PAYE plus minor investment and rental income.
Spouse B - €38,000 per year PAYE plus around €3000 rental income but this varies depending on e.g. repairs/voids etc.
Both submit Form 11s - if that is relevant.
Spouse B is a member of the company DC scheme but does not make any AVCs at the moment. We want to max this out to the 30% maximum (€10,500 per year) and ideally to do this through payroll deductions rather than end-of-year.
Step 1: select joint assessment and ensure all available tax credits transferred from spouse B to spouse A. So then for 2024 Spouse A pays 20% up to €51,000 and 40% above this, while Spouse B pays 40% above €33,000. I assume this is the correct thing to do?
Step 2: How do we set it up so that the maximum possible amount of the PAYE is charged at 40%? I assume we need to do something with the tax credits? What we don't want is for the PAYE to be taxed and therefore tax-relieved at 20% through payroll and then the rental income (which is not eligible for pension relief) to be taxed at 40% at year end - we want it to be considered the other way round.
I hope that is clear, it is a bit complicated to explain. In a nutshell though, what we want to do is to maximise the amount of pension relief at 40% rather than 20% and are not sure how to do this. Thank you