Just a quick synopsis of the current income tax rates and exemptions:
Income tax rates
Individuals and married couples
A married person can opt to be assessed for tax purposes via:
- joint assessment on the husband (s 1017) or wife (s 1018), separate assessment (s 1023), or
- single assessment (s 1016).
- €24,800, and
- the income of the second spouse.
- Personal injury settlements (s 189), payments from the Haemophilia HIV Trust (s 190), Hepatitis C compensation (s 191), and payments in respect of thalidomide victims (s 192).
- Income of artists, writers and composers, subject to an overall annual limit of €50,000 (s 195).
- Interest on savings certificates (s 42) and instalment savings schemes (s 197).
- Income of recognised charities (s 207, 208).
- Income of amateur sports bodies (s 235).
- Rent from let farm land (s 664). A claimant must be aged 55 or over, or unable through physical or mental incapacity to carry on farming.
Exemption is given for the lower of:
- the farm rental income surplus, or
- €40,000 where the lease is for more than 14 years, €30,000 where the lease is for 10 to 14 years, €22,500 where the lease is for seven to 10 years, or €18,000 in any other case.
- Rent-a-room relief (s 216A). Income from lodgers is exempt provided your gross income from such letting does not exceed €12,000 in the tax year.
- Home childcare earnings of up to €15,000 in the tax year (s 216C).
- Earnings of special assignees (s 825C). 30% of income above €75,000 in the case of employees assigned from a tax treaty country to work in their employer’s Irish operation.
- Start Your Own Business relief (s 472AA). Where a person previously long-term unemployed person sets up a business, the first €40,000 of profits in a tax year are exempt. Expires 31.12.2016.
An individual who is separated or divorced and not remarried, may by agreement with the ex-partner, opt for joint or separate assessment (s 1026).
The current tax rates are the standard rate (20%) and the higher rate (40%).
The 2015 standard rate bands are:
€33,800 in the case of an individual,
€37,800 in the case of a one parent family and
€42,800 in the case of a married couple (s 15(2)).
In the case of a dual income married couple, the €42,800 rate band may be increased by the lower of:
Therefore the maximum standard rate band a dual income married couple may have is €67,600. However, the maximum part of the standard rate band that may be transferred between the partners of a dual income married couple in a tax year is €42,800.
An individual aged 65 or over with total income below €18,000 is exempt. In the case of a married couple, one of whom is aged 65 or over, the threshold is €36,000.
If the claimant has dependent children, the exemption limit is increased by €575 for each of the first and second child, and €830 for the third child and eachsubsequent child.
The other main exemptions from income tax are:
Article re-produced with the kind permission of Taxworld. (www.taxworld.ie)