Taxation of Married Couples / Civil Partnerships Three Options Single Assessment (Separate Treatment) Joint Assessment Separate Assessment

Taxation of Married Couples / Civil Partnerships Single Assessment Each partner treated as single person Single rate band and credits Must opt for single assessment before end of the tax year

Taxation of Married Couples / Civil Partnerships Joint Assessment Must be married and living together Revenue automatically puts a couple on joint assessment when notified of marriage One spouse is assessed on joint income of the couple

Taxation of Married Couples / Civil Partnerships Benefits of Joint Assessment Married Tax Credit Home Carers Credit Increased standard rate tax band Double mortgage interest relief

Taxation of Married Couples / Civil Partnerships Tax Bands for Married Couple €33,800 for each spouse €9,000 transferrable between spouses €67,600 is maximum standard rate band for a couple

Taxation of Married Couples / Civil Partnerships Separate Assessment Each spouse taxed separately Unused credits and rate band transferred to other spouse Liability cannot exceed liability if the couple was jointly assessed Must elect for separate assessment by 1st April of tax year

Taxation of Married Couples / Civil Partnerships Separate Assessment Both spouses assessed separately, filing two separate returns Personal credit, age credit, blind person’s credit and incapacitated child credit divided equally Other credits claimed by individual incurring expense or divided between spouses where shared

Taxation of Married Couples / Civil Partnerships Home Carer Tax Credit Available for jointly assessed married (civil partnership) couple only One spouse must care for a dependent Normally dependent resides with couple Home carer with income of less than €7,200 qualifies for full credit of €1,000 Credit not available when income exceeds €9,200

Taxation of Married Couples / Civil Partnerships Home Carer Tax Credit Where home carer’s income is between €7,200 and €9,200 the credit is restricted as follows: €1,000 less ((€Income - €7,200)/2) The couple can choose to claim either the home carer credit or the additional standard rate band on the home carers income. Cannot choose both.

Taxation of Married Couples / Civil Partnerships Year of Marriage Treated as single persons for the year Calculate the liability as if married for the year When tax as married couple is less than tax as two single people then they can apply for a refund based on following formula A x B /12 A = The additional tax due as two single people B = Number of months married in the year

Taxation of Married Couples / Civil Partnerships Year of Death Treatment depends on the assessment basis prior to death Where single assessment applied before death, there is no change to the taxation of the surviving spouse, except for his/her entitlement to the widowed person’s tax credit

Taxation of Married Couples / Civil Partnerships Year of Death – Joint Assessment Treatment depends on whether the assessable spouse or non-assessable spouse dies

Taxation of Married Couples / Civil Partnerships Year of Death – Joint Assessment – Assessable spouse dies Computation for deceased spouse will be from 1 January to date of death Entitled to full married credit and full rate band Entitled to PAYE credit for both spouses if in PAYE employment Incapacitated child credit apportioned on time basis

Taxation of Married Couples / Civil Partnerships Year of Death – Joint Assessment – Assessable spouse dies Computation for surviving spouse will be from date of death to 31 December Entitled to widowed persons’ tax credit in year of bereavement and single person’s rate band Entitled to PAYE credit if in PAYE employment Incapacitated child credit apportioned on time basis

Taxation of Married Couples / Civil Partnerships Year of Death – Joint Assessment – Non-assessable spouse dies One tax computation required for assessable spouse Full income of surviving spouse for the year is taxed plus income of deceased spouse to date of death Entitled to married credit and standard rate band Entitled to two PAYE credits if both spouses in PAYE employment

Taxation of Married Couples / Civil Partnerships Separation and Divorce If a married couple/civil partnership are not living together and it is likely to be permanent they are separated Separation can be an informal arrangement or under a legally enforceable maintenance agreement

Taxation of Married Couples / Civil Partnerships Separation – legally enforceable maintenance agreement Two options – single assessment or joint assessment

Taxation of Married Couples / Civil Partnerships Separation – legally enforceable maintenance agreement Single assessment Taxed as single persons and account for own tax liability Maintenance payments are deductible for person paying them Recipient is taxable on maintenance payments under Case IV Only maintenance payments to former spouse are taxable. Maintenance payments for children are ignored for tax purposes.

Taxation of Married Couples / Civil Partnerships Separation – legally enforceable maintenance agreement Joint assessment Taxed jointly on a separate basis Maintenance payments are ignored To qualify for this option: Both individuals must be Irish resident Cannot be remarried

Taxation of Married Couples / Civil Partnerships Separation – no legally enforceable maintenance agreement Taxed as separate individuals No deduction available for maintenance payments Where one spouse can show they are maintaining the other, the married credit can be claimed but not the married rate band

Taxation of Married Couples / Civil Partnerships Year of separation Assessable spouse Taxed on their own full income for the year plus spouse’s income to date of separation Entitled to married credit and married rate band Non-assessable spouse Taxed on own income from date of separation to 31 December Entitled to single credit and single rate band

Taxation of Married Couples / Civil Partnerships Divorce Couple must be separated for 4 years before they can divorce Tax arrangements are put in place after separation rather than divorce, usually Can continue to be taxed in the same way after divorce as during separation: Single assessment Joint assessment