Session 3 Flashcards
Steps involved in calculating an individuals tax liability
Step 1 - Identify Income
Step 2 - Categorise into Schedules & Cases
Step 3 - Apply Rules of Computation of Income
Step 4 – Apply tax credits, tax reliefs & charges
Give a breakdown of all Schedules and Cases
Schedule D
- Case I Trading Income
- Case II Professional Income
- Case III Investment income received gross
- Case IV Investment income received net or income and income not taxed under any other Case or schedule. (The bucket!)
- Case V Irish rental income
Schedule E - Income from employment
Schedule F - Irish Dividend Income
Income and Tax Bands for 2013
-Single/Widower no children
-@20% 32,800
@41% Rest
Single with children
-@20% 36,800
@41% Rest
Married one income
-@20% 41,800
@41% Rest
Married 2 income
-@20% 65,600
@41% Rest
What are the 3 types of tax credits and reliefs and give examples
1 Non-refundable tax credits – relate to personal circumstances, can’t reduce tax below zero. DIRT is an example
2 Refundable tax credit – DWT, PAYE
3 Deduction from income - pension contributions
What are the Basic Personal Tax Credits
Married/Civil Partner Tax Credit
- Available where husband/wife or civil partners are jointly assessed
- €3,300
Single Tax Credit
- Available to individuals other than married/civil partners or widows jointly assessed
- €1,650
What are the Surviving civil Partner Tax Credit
Widowed Person/Surviving Civil Partner with dependent children:
- Widowed person/surviving civil partner credit (depends on circumstances)
- Single Parent Family Credit
- Widowed/surviving civil partner parent credit - additional for first 5 years after bereavement
“Dependent child”:
- Under 18, or
- If over 18, in full time education or permanently incapacitated
What is the Single Parent Family Tax Credit
- Available to widowed/surviving civil partner or single parent with “qualifying child”
- Not available to unmarried couple living together
- Available to both parents if not living together and jointly maintain the child (child must reside with parent for whole or part of year)
- Same credit irrespective of number of children
Paye Credit
Available if in receipt of Schedule E (i.e. P60 income)
Credit cannot exceed the amount of Schedule E income of the individual at the standard rate
e.g. salary €1,000 – max PAYE credit = €200
Also available in respect of foreign employment where subject to foreign tax at source
Not available to proprietary director or their spouse
– more than 15% OSC
What is the Blind person credit
Credit if visually impaired
If both husband and wife or both civil partners are visually impaired then credit available to each individual
Medical cert showing degree of blindness is required
Credit for guide dog at standard rate
What is the Dependent relative Credit
Available if taxpayer maintains a dependent relative at own expense
Not available if income for dependent relative exceeds €13,837 in 2013
Two or more jointly maintain – apportioned
“Dependent Relative” defined in manual
Credit is 70
What is the Incapacitated Child Credit?
Credit available for qualifying child
“qualifying child” and “child” defined in manual
If two or more persons maintain the child, allocated by reference to the amount spent by each on maintaining the child
If entitled to this credit, not entitled to Dependent Relative Credit in respect of same child
What is the Home Carer Credit
Max €810 for 2013
Available to Married couple/Civil Partners where jointly assessed
One spouse/civil partner works in the home caring for one or more dependents that reside with them (or within 2km radius)
Only one credit regardless of number of dependents
NB - Married couple/civil partners cannot claim increase in the standard rate band and the home carer credit
Can claim what gives lower liability - may need to do calculation
