Payments

Income tax for taxpayers is due by 31 October of the following tax year. The payment date for relevant tax on share options (RTS) is 30 days after the share option is exercised.

In addition, preliminary tax – which is a prepayment of the current year’s tax liability – is due for payment by 31 October in the current tax year. For taxpayers who pay and file their tax return online via ROS; the Revenue Commissioners may extend the filing and payment date to mid-November. This is announced by the Revenue Commissioners on an annual basis.

Three options are available when calculating the amount of preliminary tax payable

• 100% of the preceding year’s final income tax liability

• ►90% of the current year’s final income tax liability

• ►105% of the pre-preceding year’s final income tax liability. This option is only available to those who wish to pay preliminary tax by direct debit instalments and where they had a liability in the pre-receding year

Taxation of married couples/civil partners

There are three methods of taxation available to married couples/civil partners:

Joint assessment: Joint incomes are treated as belonging to the spouse/civil partner nominated by the couple. If neither spouse/civil partner is nominated, the spouse/ civil partner with the greater income in the previous tax year is treated as being the nominated spouse/civil partner. The nominated spouse/civil partner is given all the credits and the rate bands applicable to married couples/civil partners, and assessed on the income and gains of both spouses/civil partners.

Separate assessment: Each spouse/civil partner is treated as a single person. However, an application can be made to apply to have the unused tax credits of one spouse/ civil partner allocated to the other spouse/civil partner. An application for separate assessment must be made before 1 April in the relevant tax year or before 1 April in the tax year following the year of marriage.

Single assessment: Each spouse/civil partner has the option to be treated as a single person. However, excess income tax credits or allowances of one spouse/civil partner cannot be transferred and set against the income of the other. A married couple/civil partners must elect to be assessed on a single basis by the end of the relevant tax year.

Taxation of separated/divorced couples

Maintenance payments

Income tax and the USC is not to be deducted at source from legally enforceable maintenance payments. Maintenance payments are deductible for income tax and USC purposes in the hands of the payer, but chargeable to income tax and USC in the hands of the recipient. In such cases, both spouses/civil partners are assessed to income tax as single persons.

In the case of a separated person who makes an enforceable maintenance payment, PRSI is levied at the point at which it is earned as part of the person’s earnings/income and also as income in the hands of the receiving spouse/civil partner. However, a refund of PRSI paid by the maintenance payer can be claimed by submitting a claim to the PRSI refunds section.

Where payments are made to a spouse/civil partner for the maintenance or benefit of a child, the payment is to be made to the spouse/civil partner without deduction of income tax and USC and the payer’s taxation liability is calculated without granting any deduction for the payment. The payment is not treated as income in the hands of the recipient.

Investment income