on Maternity Leave worth transfering over tax credits to husband ?

C

cityworker

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I just started Maternity Leave and all going well hope to take some unpaid leave and not return to work until Jan 2011.

My employer tops up my Maternity Benefit for 18 weeks so i get a full salary. I will also be paid for approx 8 weeks holidays.
My usual annual salary is €50k and i have worked out that my taxable income for 2010 will be approx €27 k

My husband earns €45k and pays BIK on company car so his taxable income is approx €52k

We are currently for tax purposes individually assessed as we both earn roughly the same and for that reason we just never notified the reveneue that we are married.

i see from the revenues website that if i notify them before 31/03 i can elect how we want our tax credits shared.

Just wondering if I am better to transfer my tax credits to my husband or wait until the end of the year and claim back the tax then.
If i transfer my credits to my husband now will I be paying more tax on the money that I am earning during the year.

Just wondering what other people have done in similar circumstances.

Thanks
 
The net amount of tax that you will pay between you will be the same either way, so it is personal preference really.

Option 1 : You opt for joint assessment, and transfer your personal tax credits to your husband, he will get more take home pay than usual, and you will get less during the year, but the net tax that you pay between you should be less. You will still have unused tax credits when you go on unpaid leave. Your employer may refund you these tax credits over the course of the year, some do, not sure if this is the norm, you should ask payroll in your company,

Option 2 : You opt for joint assessment and leave your tax credits as they are.
You will both get the same take home and you will have unused tax credits at the end of the year, and you can apply for a tax refund.

You should opt for join assessment either way, as you can then take advantage of maximizing the use of the tax bands between you.

I would recommend that you use www.taxcalc.eu to try out the different scenarios
 
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