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Love, marriage and lower taxes

Marriage brings greater flexibility.

The benefit of you being married is that you get to chooses how you are taxed and the following options are as follows.

Joint Assessment.  This means that you will be taxed as one unit and allowed some tax concessions not used by one spouse to be transferred on to the other.

Separate Assessment.  This is very like joint assessment except that all the available allowances are split evenly between you and your spouse.

Single Assessment.  This is where you and your spouse decide to be treated as if you were two single people for tax purposes.

Under joint and separate assessment some unused allowances can be passed between husband and wife.  This is beneficial in the case of a two-income couple where one spouse earns more then the other.  Under normal circumstances the revenue Commissioners will assume that you wish to be taxed under joint assessment and will calculate your tax liability accordingly.

Other tax concessions made to married couples.

  • Assets may be transferred between husband and wife without being subject to capital gains tax.
  • Any capital losses made by one spouse may be used by the other spouse to reduce a capital gains tax bill.
  • Any gifts and inheritances given by one spouse to another are completely free of capital acquisition tax.
  • Any money received by yourself or your spouse from a life assurance policy will be completely tax free.
  • Married couples do not have to pay stamp duty when they transfer assets from one to another.

Great news if you are married and self employed.

If you are self employed or run your own business, by employing your spouse you may be able to save up to €5000 a year in tax.  To make this saving the total amount of income you and your spouse earn each year must be at least €70,800.  It does not have to all come from your own business your spouse can earn up to €25000 and still be given that tax break.  They reason why this tax saving can be made is the fact that a two income family can take advantage of the €67,600 standard rate band as opposed to the €42,800 band available to a single income family.

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