Tax Credits while on Maternity Leave

Hi
My wife will be going on mat. leave end August and as such her work for the year will be done at that point because her leave will carry her into the New Year. My question is, can she transfer to me the 4 unused months of credits and standard rate allowance at that point, or do we have to wait until the end of the year and have her claim tax refund, bearing in mind that she takes most of the tax credits in any case so probably hasn't paid enough tax to be able to claim it back, so I'd be needing to claim back my tax back off her credits at the end of the year in any case?

P.S. Her work does not top up her benefit so thats why I'm asking, as the beenfit is tax free.

If you are already on [broken link removed] and you are the assessable spouse then I assume that her going on maternity leave would have no impact on your tax situation since the credits and standard rate band allocated to her employment are not transferrable? If/when she returns to work then she will automatically benefit from her unused credits and standard rate band via payroll.

Maybe I'm wrong...

ClubMan said:

If you are already on [broken link removed] and you are the assessable spouse then I assume that her going on maternity leave would have no impact on your tax situation since the credits and standard rate band allocated to her employment are not transferrable? If/when she returns to work then she will automatically benefit from her unused credits and standard rate band via payroll.

Maybe I'm wrong...

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She can't benefit because she won't be working again in this tax year. And you can't move credits from year to year. Currently we have net credits of about 5700. But she has 3790 of them allocated to her, but she won't have used them all up. So I want to take back the balance of the unused credits for the last 4 months of the year.

You say we can't transfer them? But sure that means I will be paying tax while she has unused credits and these credits are given to us as a couple to share as such. Surely be to Christ that can't be right....I hope not.

What sort of credits make up the €3,790 allocated to your wife? What standard rate band is allocated to her? Not all tax credits, allowances and standard rate band amounts are transferrable between spouses. See [broken link removed] that I posted earlier (underlining is mine):

Under Joint Assessment, the tax credits and standard rate cut-off point can be allocated between spouses to suit their circumstances, for example:

• If only one spouse has taxable income, all tax credits and the standard rate cut-off point will be given to him or her.
• If both spouses have taxable income, they can decide which spouse is to be the assessable spouse and request the tax office to allocate the tax credits and standard rate cut-off points between them in whatever way they wish. [PAYE tax credits, employment expenses and the basic standard rate cut-off point are non transferable]

Where the tax office does not receive a request for the allocation of tax credits and reliefs, it will normally give all the tax credits (other than the other spouse’s PAYE and expense tax credits) to the assessable spouse.

...

Any unused tax credits and standard rate cut-off point up to 37,000, other than PAYE tax credit and employment expenses, can be transferred to the other spouse but only at the end of the tax year. The increase in the standard rate tax band of up to 19,000 is not transferable between spouses.

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If she doesn't return to work this year then she may be due a refund of tax either before or at the end of the year in respect of unused non transferrable credits which offset tax already paid. If she is not returning to work then perhaps she can return a [broken link removed] in order to claim back tax overpaid before the year is up.

she has obviously her PAYE allowance out of the credits she has, but she also has the vast majority of the marriage credit.
In addition, I have less than the max 38800 standard rate assigned to me as she nicked some of it. Again, I want to get that back from her now, because she can't use the full amount of her standard rate also.

The issue I have is that even if she goes with a P50 claim, the tax she has paid is less than the value of her remaining credits as she is essentially set-up to be more or less tax free. So i want to get back the portions of the the credits and standard rate cut off that can be shared btu will be unsed by her...does that now make sense?

If there are transferreable credits, allowances and standard rate band then there should be no problem in getting these allocated to you from when she goes on maternity leave - or possibly even in advance. Just write to Revenue and explain the situation - I'm sure that they can sort it.

Thanks Club. I think someone in here who i work with has an Auntie in revenue so I might chance ringing her!

P.S. GO ON CORK CITY FC!!!!

I've always found it fine to deal with Revenue in general rather than people I know who work there. I also find it better to put queries officially in writing.