Hi,
I have a tax query if those more knowledgeable than I could help out please.
If an individual has no income other than investment income, what is that tax treatment on that income for both income tax & PRSI?
Specifically I am talking about a scenario where within a married couple, there is single PAYE earner at the higher tax rate, and a stay at home wife.
Am I correct in thinking that if the couple were making an investment which would be subject to income tax (let's say a debt free rental property and high dividend yield stocks for illustration), that if these investments were made solely by the wife, she could use her tax band to earn investment income at 20% up to c. 25k per annum?
And secondly, specifically in relation to PRSI, as this would be her only source of income, she would be subject to Class S PRSI (minimum 500), which in turn counts towards contributory pension in the future?