Will we save on income tax if we marry or stay single?

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kbmo

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Hey all...

Hope someone can help with a quick question..
Sorry if asked before, but the search facility confuse me a little..

I am a single man living with my partner and we have 3 children. One of the children (eldest) is not my blood child but her blood father plays no part in her life, either financially or otherwise….

I earn 95k /year with a company car and my partner stays at home minding our children with this likely to remain the case for the foreseeable future…
My partner has no income whatsoever and receives no social welfare or anything similar ( except childrens allowance obviously)..

We are engaged and plan on marrying at some stage when finances allow etc.. My question really is, would we be better off financially by even (now) going ahead with a civil marriage initially?
I am clueless on tax really and wondered about this recently, as to how much we would change our situation by..?

If you need more info in order to provide guidance, let me know and I will post back.
thanks in advance for any help
 
Simple answer - yes. If your partner has no income, and you are a high rate taxpayer, then marriage will have a financial benefit.

As it stands, in 2012 a married couple with children, with only one earner, earning 95k (or anything more than the mid 40's), would be better off by €4,350 over the course of the year.
 
Hey Mandelbrot,

Thanks for the quick reply!

That figure really is food for thought given our tight circumstances at present.....
Forgive my ignorance, but is there a simple way you worked that out, just so I can see for myself….?
(after all, you could be my partner trying to trick me into early marriage :D )

Again thanks for the quick reply
 
kbmo said:
Hey Mandelbrot,

Thanks for the quick reply!

That figure really is food for thought given our tight circumstances at present.....
Forgive my ignorance, but is there a simple way you worked that out, just so I can see for myself….?
(after all, you could be my partner trying to trick me into early marriage :D )

Again thanks for the quick reply
Click to expand...

Single:
Income | | 95,000
Notional Tax
32,800 @ 20% | | 6,560
62,200 @ 41% | | 25,502
Tax Credits
Personal | 1,650 |
PAYE | 1,650 |
Total credits | | (3,300)
Tax payable | | 28,762

Married:
Income | | 95,000
Notional Tax
41,800 @ 20% | | 8,360
53,200 @ 41% | | 21,812
Tax Credits
Personal (1,650 x 2) | 3,300 |
PAYE | 1,650 |
Home carers credit | 810 |
Total credits | | (5,760)
Tax payable | | 24,412

The difference being made up of:
Additional 9,000 taxed at 20% (rather than 41%) - tax effect 1,890 [9k x (41%-20%)]
Marriage credit (3,300) > Single credit (1,650) = 1,650
Home carers tax credit = 810

You can play around with figures here: http://www.taxcalc.eu/ (warning: don't tick the box for children if selecting "single", as it will automatically give you a one parent family credit that you aren't entitled to, since you are living with your partner!)
 
Hi Mandelbrot,

again thanks for the quick reply...makes sense to me now alright..
"Home carers allowance" -is that a tax credit a married person can avail of due to the fact their wife (or husband) stays at home to mind their children..??

thanks again
 
Perfect.. thanks..

Now to find out how to and how long does it take to organize a civil marriage..!!
 
Your partner should make sure she is signing on for prsi credits for her future pension entitlements. Unemployed people as far as I know are entitled to a 'free' stamp each week. Also there is credit for a certain amount of years for stay at home mothers.
 
PolkaDot said:
Would you give her a proper day out? :)
Click to expand...

Definitely will..;)

The plan would be to use any tax-saving cash accruing to help save for such an event...We have both discussed it and although we dont know alot about civil marriage (yet!), if we did go thru with it, we would do so on the qt from families etc (if possible)....
 
Bronte said:
Your partner should make sure she is signing on for prsi credits for her future pension entitlements. Unemployed people as far as I know are entitled to a 'free' stamp each week. Also there is credit for a certain amount of years for stay at home mothers.
Click to expand...

Not sure what you mean but my partner is not signing on for anything at moment..I suppose technically she is not unemployed as we have no choice but for her to be a stay at home mum...

what do you suggest we do, if anything ?
 
kbmo said:
Definitely will..;)

The plan would be to use any tax-saving cash accruing to help save for such an event...We have both discussed it and although we dont know alot about civil marriage (yet!), if we did go thru with it, we would do so on the qt from families etc (if possible)....
Click to expand...

Good idea. I'd imagine it's something you could arrange relatively quickly. Although, you have to notify the state at least 3 months in advance of your intention to marry. So that is probably the quickest time in which you could do it.

http://www.groireland.ie/getting_married.htm#section1
 
As a final question on this, I am presuming that there is no other way on this?? That is, beacuse we are not married, we are not maximising our tax position??

Presume there is no point ringing the Tax office?...I am PAYE so all would be in order on that side thru my employer's records I'd say

So it's get married or continue to be less tax efficient....??
 
What other way could there be, legitimately?

You may well not be claiming everything (tax credit-wise) that you personally are entitled to, but that's unrelated to what I described above - which is specifically the tax benefit from being married (or civil partnered).

I have a real bugbear about it personally TBH, as I don't really want to get "married" and would quite happily enter a civil partnership with my OH, but the piece of legislation intended to combat inequality is inherently discriminatory in that it only allows same sex civil partnership - go figure...

I reckon if I could get a SC to take a Supreme Court case or a European case on it, we could get civil partnership for heterosexual couples - but since when do they care about equality for the majority; it's all about the minorities in the politically correct world we currently inhabit.
 
Maybe veering off topic but this comparison of marriage versus civil partnership in Ireland might be of interest - it seem to be balanced enough even if it is published by an advocacy group with a particular view on matters in this context:

[broken link removed]
 
xeresod said:
From a financial (tax, inheritance, sw etc) standpoint civil partnership gives the same benfits as marraige, the big difference being lack of rights for adoption and no recognition of the non-bioligal parent in the partnership, so I'm curious as to why you want civil partnership rather than marraige?

(Anyway, hopefully this "discriminatory" civil partnership will be ended sooner rather later - in favour of full marraige for same-sex couples)
Click to expand...

That would be fine with me Xeresod, as it stands there's double inequality!
 
mandelbrot said:
What other way could there be, legitimately?

You may well not be claiming everything (tax credit-wise) that you personally are entitled to, but that's unrelated to what I described above - which is specifically the tax benefit from being married (or civil partnered).

I have a real bugbear about it personally TBH, as I don't really want to get "married" and would quite happily enter a civil partnership with my OH, but the piece of legislation intended to combat inequality is inherently discriminatory in that it only allows same sex civil partnership - go figure...

I reckon if I could get a SC to take a Supreme Court case or a European case on it, we could get civil partnership for heterosexual couples - but since when do they care about equality for the majority; it's all about the minorities in the politically correct world we currently inhabit.
Click to expand...

Hey Mandelbrot..

I'll take that as a NO so..!! Its civil wedding or nothing so....
I agree with you that it is totally discriminatory too, and as you say against the majority....:confused:
 
Same sex people asked & lobbied for Civil Marriage, not a cut down subset of it, which is what Civil Partnership is.

Yes I agree the same options should be there for everyone, but please dont make it sound like the minorities asked that the majority be excluded!
 
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