Transferring shares to spouse's name to avoid income tax on dividends

[Protocol]

Scenario: married couple, one earner, paying 41% MTR.

Earner has 3300 married tax credit, plus 1650 PAYE tax credit.

Also Home Carers tax credit in respect of other spouse taking care of child.

Earning spouse owns a few shares, some pay dividends.


Could the shares be transferred into the non-earning spouse's name, and so reduce/avoid income tax on the dividend income?

Can the spouse's unused PAYE tax credit be allocated against the tax due on the dividends?

 

[mandelbrot]

Could the shares be transferred into the non-earning spouse's name, and so reduce/avoid income tax on the dividend income?

Yes

Can the spouse's unused PAYE tax credit be allocated against the tax due on the dividends?

No

 

[Protocol]

If no tax credit can be applied, then the tax on the div is reduced from 41 to 20?

But not eliminated?



I think what happens is that the SCROP can be extended by the other spouse's income?

 

[mandelbrot]

If no tax credit can be applied, then the tax on the div is reduced from 41 to 20?

But not eliminated?

I think what happens is that the SCROP can be extended by the other spouse's income?

Yeah that sounds right based on the detail in your OP.

 

[Mrs Vimes]

A couple can have either increased SRCOP or home carer's allowance - unless the dividend income is over €4,000 it is not worth arranging for the income to be the non-earning spouse's.