Income Tax for Married Persons & Civil Partners in Ireland

Income Tax for Married Persons & Civil Partners in Ireland. Understanding the regulations can help you take advantage of available tax reliefs

Navigating the complexities of income tax can be challenging, especially when considering the specific treatments for married persons and civil partners in Ireland. Understanding the regulations set out in the Taxes Consolidation Act 1997 (TCA) can help you ensure compliance and take advantage of available tax reliefs. This detailed guide will provide you with the necessary information on income tax treatment for married couples and civil partners, including key changes and examples.

In Ireland, the income tax treatment of married persons and civil partners is governed by specific parts of the TCA. Part 44 of the TCA addresses the tax treatment of married persons, while Part 44A covers civil partners.

Recognition of Same-Sex Marriage and Civil Partnership

Recognition of Civil Partnership

The Civil Partnership and Certain Rights and Obligations of Cohabitants Act 2010 amended the TCA to provide for the tax treatment of civil partners. Since the 2011 year of assessment, civil partnerships recognized in the State are covered under Part 44A TCA. However, the enactment of the Marriage Act 2015, effective from 16 November 2015, allowed same-sex couples to marry in Ireland. From this date, no new notices of intention to enter into a civil partnership are accepted in the State.

Civil partnerships formed before the Marriage Act 2015 continue to be recognized, and their tax treatment remains unaffected. Those who entered into a civil partnership in Ireland before 2016 and did not notify Revenue of their status change can no longer amend civil status assessments for tax years prior to 2016 due to the “four-year rule” in section 865 TCA.

If civil partners have not previously advised Revenue of their status, they can do so and amend their tax position for up to four years preceding the year in which the claim is made. Existing civil partners who have not changed their status will continue as civil partners.

Same-sex couples who entered into a registered partnership in another jurisdiction before 16 May 2016 are recognized as civil partners in Ireland, provided the relationship is legally recognized under Irish law. However, any new civil partnerships entered into outside the State after 16 May 2016 are not recognized as civil partnerships in Ireland.

Income Tax for Married Persons & Civil Partners in Ireland

Marriage Act 2015

From 16 November 2015, following the enactment of the Marriage Act 2015, the provisions of the TCA apply equally to married couples, regardless of whether the marriage is between two persons of the opposite sex or the same sex. Marriages lawfully contracted between same-sex couples in another jurisdiction are automatically recognised in Ireland from 16 November 2015 or from the date of marriage, if later.

Example 1:

Isobel and Jen were legally married in Spain in 2010. They moved to Galway in 2011 and registered for Irish tax. Initially recognized as a civil partnership for Irish tax purposes, they have been recognized as a married couple since 16 November 2015.

Example 2:

Jaziel and João registered as civil partners in the UK in 2010. They relocated to Athlone and registered for Irish tax on 1 July 2011. They married in Ireland on 1 July 2017. They were recognized as civil partners for tax purposes until 30 June 2017 and as a married couple from 1 July 2017.

Year of Marriage or Registration of Civil Partnership

Year of Marriage or Registration Relief

In the year of marriage or registration, each individual is taxed as a single person. However, relief may be available if the aggregate tax payable by the couple as single individuals exceeds the tax that would have been payable if jointly assessed for the entire year. This relief is available under section 1020 TCA for married couples and section 1031G TCA for civil partners.

Tax Relief Calculation Formula:

Relief=(A×B​÷12)

Where:

• A is the amount by which the tax payable by the couple as single individuals exceeds the tax that would have been payable if jointly assessed.
• B is the number of calendar months in the year for which the couple was married or in a civil partnership.

Any overpayment of tax is divided between the couple based on the tax paid as single individuals.

Example 3:

A couple married on 10 July 2024.

• Spouse 1: Income of €48,000.

• Tax: €42,000×20%+€6,000×40%=€8,400
• Tax Credits: Personal (€1,875) + PAYE (€1,875) = €3,750
• Tax payable: €8,400 – €3,750 = €4,650
• Spouse 2: Income of €24,000.

• Tax: €24,000×20%=€4,800
• Tax Credits: Personal (€1,875) + PAYE (€1,875) = €3,750
• Tax payable: €4,800 – €3,750 = €1,050
• Combined tax payable as single persons: €4,650 + €1,050 = €5,700
• Tax payable under joint assessment:

• Income: €72,000.
• Tax: €72,000×20%=€14,400
• Tax Credits: Personal (€3,750) + PAYE (€3,750) = €7,500
• Tax payable: €14,400 – €7,500 = €6,900
• Difference: €5,700 (single) – €6,900 (joint) = €1,200

Repayment for the year of marriage:

Repayment=(€1,200×6÷12)=€600

Repayment to Spouse 2: €600×€1,050÷€5,700=€110

Repayment to Spouse 1: €600×€4,650÷€5,700=€490

Income Tax for Married Persons & Civil Partners in Ireland

Entitlement to the Single Person Child Carer Credit (SPCCC)

The entitlement to the Single Person Child Carer Credit (SPCCC), which replaced the One Parent Family Tax Credit (OPFTC) from 1 January 2014, is determined based on circumstances on 1 January of the assessment year. If a couple marries or enters a civil partnership after this date, the SPCCC should not be withdrawn for that year. However, it should be excluded from the computation of tax payable under joint assessment for any additional ‘Year of Marriage or Registration’ relief. SPCCC is not available to individuals entitled to the joint personal tax credit under section 461(a) TCA and will be withdrawn in future years for individuals who previously qualified for it.

Understanding the income tax treatment for married persons and civil partners in Ireland is essential for ensuring compliance and optimizing tax benefits. Whether dealing with the implications of the Marriage Act 2015, recognizing civil partnerships, or navigating the complexities of the ‘Year of Marriage or Registration’ relief, staying informed is key. If you need further assistance or personalized advice, consider consulting with a taxation compliance expert to ensure you are making the most of your tax situation.

Disclaimer:

The information in this blog post is intended for general informational purposes only and should not be construed as professional advice. It is your responsibility to seek professional advice tailored to your specific situation.

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