Many thanks Joe 90 for your helpful response. I was confused as on my husband's tax credit cert for Jan 2010 to Dec 2010 details as follows:
Personal Tax Credit 3,660
PAYE Tax Credit 3,660
Flat Rate Exps 12.80
Service Charges 70.00
So total tax credits 7,402.80
Tax credits reduced by
DSFA Pension 2,264.00
Net Tax Credits 5,138.80
Tax Rate Bands
Rate Band 1 56,723.00
This rate is increased by
flat rate exps 64.00
This rate band is reduced by
DSFA pension 11,323.00
The amount of your income taxable at 20% 45,464.00
All income over 45,464.00 euro is taxed at 41%
Therefore I had assumed based on these figures that although tax credits and rate bands for 2012 are slightly different that some of the income would be taxed at the rate of 41% if we did purchase a property with rental income.
I was working on the presumption as follows:
Personal Tax credits for 2012 3300
PAYE Tax credits 3300
Flat rate exps 12.80
Service charges 70.00
Total tax credits 6,682.80
Working on the following figures
My husband's gross income approx 30,000p.a. 2012
DFSA pension me gross 12,054p.a.
Rental income(before allow deds) 12,000p.a.
So total income for 2012 54,054 gross
Less tax credits 6,682.80
Giving taxable income of 47,371.20 x 20% So if property were to be purchased in joint names I have worked out tax liability as follows approx:
Taxable income of 47,371.20 x 20% = 9474.24 income tax
USC 2% on 10,036 @ 2% = 200.72
income from 10,036.01 to 16,016 x 4%=
5,979.99 x 4% = 230.20
Income above 16,016 x7% =
31,355.21 x 7% = 2,194.86
P.R.S.I. approx 47,371.20 x 4%
if P.R.S.I. was payable on all income
including rental income 1,894.85
This would equal a total income tax
liability of 13,994.87euro
Obvisously if some of this income should be taxed at a rate of 41% more income tax is due. This is what I have not sure about.
Or if just working out taxable income if property purchased in joint names I have worked out income payable on rental property as follows:
Rental income (less allowable deductions) 12,000 approx
Income tax of 12,000 @ 20% = 2,400
USC OF 7% OF 12,000 = 840
From 1.1.13 P.R.S.I. @ 4%= 480
So total income tax liability of Total 3,720 due on rented property
So, Income from rented property 12,000
Less tax liability of 3,720
Gives a net income after tax of 8,280 euro on rented property
p.a.
Sorry for the long drawn out response. Would very much appreciate Joe 90 if you could let me know if these figures are correct. Thank you again for all your help.