Dental benefits from PRSI

Posted on | September 29, 2009 | 2 Comments

Are you paying for visits to your dentist which you should be receiving as a benefit for paying PRSI or for having a medical card?

What’s Covered
In general, a normal person with healthy teeth will get one dental examination and two cleanings per year. You’re also entitled to significant cost reductions on fillings/extraction/root canal and host of other pleasurable treatments under PRSI. Furthermore, you can also claim tax back on more complicated treatments via the Med2 form (Note that you can even claim against dental work done in another EU country! But make sure you bring the Med2 form as you will need the dentist to sign it)

How it’s claimed
Dentists will approach the PRSI entitlements in one of two ways:

• Good dentists will do their best to discover if your entitled to PRSI benefits before the treatment. They’ll either take your word that your covered by PRSI or they’ll make a phone call to check (which can take a few minutes). If your covered then the dentist will charge the department, or if your partially covered for the treatment then you pay the difference.
• Alternatively, the dentist will charge you the full amount of the treatment there and then, they have to follow up with the department about your PRSI (and if you are covered will send you the refund). If this happens, make sure you follow up with your dentist about it. It takes around a month for the department to pay the dentist, so if you are due a refund and none is forthcoming, you may need to chase them!

At the end of the day, it’s your responsibility to know if your covered or not (as is the case with your general tax affairs), not the dentists, so find out what your benefits are and know your rights! If you are in any doubt, get in touch with the department.

Note that if your spouse is dependent on you, they are covered on your PRSI. Also note that children are not covered, you either have to bring them privately or you can go through your local health board to have them treated.

If you need help with your Med2 claims (or general tax affairs), why not get in touch with us at www.redoaktaxrefunds.ie or find out more about medical expense claims in our Top Tax Tips

Should I cash in my Policy?

Posted on | September 21, 2009 | 3 Comments

Today, I received in the post a performance statement for a endowment insurance policy I took out 11.5 years ago.  €63.49 (or 50 of old money) paid monthly into a policy to mature after 20 years.

Usually they get rapidly filed away, but I decided for a change to do a personalised performance assessment and I do stress personalised – this aint coming from the book of how to assess investment performance.

Performance Yardstick 1:  Current Investment Value vs Money put in

Firstly, lets look at what we have put in versus what the policy is now worth.

• €63.49 invested into the fund for 11.5 years amounts to €8,761.62.
• The current value of the fund is listed at €7,254.60

Doesn’t look the best, does it?

Now even if we allow for the fact that the broker who sold you the policy gets the 1st years premium, and as it’s a assurance policy (i.e. an amount is guaranteed on your death) we’ll be generous and say that costs another years premium, we are still showing no growth on the policy.

Performance Yardstick 2:  Guaranteed future value versus encashment

The company also provides us with a guaranteed future value.

For my policy, this is €14,749.

The current encashment value of my policy is €7,255

If I were to encash my policy and investment my future monthly premiums of €63.49 into a deposit account with no fees and 0% interest, this would amount to €13,731.

This minimum guaranteed encashment value is equivalent to roughly a 1.1% annual investment return.  Personally, I think this is something you could live with depending on your risk profile, but you’d probably want to know more about how much of the potential upside you would share in.

Performance Yardstick 3:  Future Investment Value based on illustrated growth rates

Things haven’t gone well to date, but my investment company have provided 2 illustrations of future growth and how much the plan would be worth at this investment growth rates.  These are provided under instruction from the regulator for guidance purposes.  My investment manager provided these at 4.5% and 6.5% annual growth rates.

Let’s look at their estimated future value of the fund at a investment growth rate of 4.5%.  This is €16,500.

Let’s be careful not to assume that this amount equates to my current fund value + future contributions growing at 4.5%, because there are costs to account for of course.  Having cracked together a few hard numbers, I have calculated that €16,500 equates to a annualised return of approximately 2.8%.  so that’s roughly 1.7% of fund growth disappearing in fees, or about €1,900.

So should i cash in my Policy?

let’s be honest about this – most of us invest in policies such as this one so that we don’t touch the money – very few people have the self control to have money in touching distance and not find something they could spend it on.

And in our instance, we’d really like to get double glazing in, but are lacking that type of money at hand, even with us putting together such a huge heating bill last year.

what do you think?

So I’d love to hear what ye guys out there think: would you recommend cashing in this policy and getting the windows done or leaving it in the hands of the investment manager for another 8.5 years?

Non Principal Private Residence €200 tax

Posted on | September 21, 2009 | No Comments

Have you paid the new Non Principal Private Residence Tax Charge?  The deadline for this charge is the 30th September.

You can pay it online from  https://www.nppr.ie/

All you need to pay this is your PPS number, address of property and, of course, a bank card to pay for it.

We’ve used it a few times for our clients and it appears to work pretty well and be fairly simple.

Luas bus crash – should have gone to specsavers!

Posted on | September 18, 2009 | 5 Comments

Is this Photoshopped – Specsavers couldn’t have been that lucky!

How will NAMA affect Property Market?

Posted on | September 17, 2009 | 2 Comments

NAMA and the Property Market

The announcement of the Nama deal with the banks yesterday focussed on the impact on the banks.

But probably the greatest impact the change will have is on the Property Market.  If you take into account NAMA, proposed water charges and property tax and possible changes in Stamp duty, we are entering a new phase in the volatile phase in history for Irish Property.

How do you think it will pan out?

Add your voice to a survey of public sentiment from MyHome.ie.  If you are an investor, Home owner, or entering the market the results of this survey will be important to you, so add you voice.

The survey is at http://MyHome.ie.questionpro.com

Equitable but not Neutral

Posted on | September 14, 2009 | No Comments

Just some quick thoughts on the Commission on Taxation and Stamp Duty.

One of the main thrusts of the commission on taxation is that its purpose was not to increase the tax burden, but rather to distribute it more fairly.

However at the time the commission was put together, Stamp Duty produced a huge portion of the tax take in this country.  At this stage it produces minimal return.  In remaining Revenue neutral, the commission has proposed reducing or removing stamp duty in favour of other taxes including carbon, property and water.  It was proposed that this would be more equitable also.

But not any more.  Stamp duty is gone and there is a great big hole in the budget.  This will have to be filled from elsewhere, be it water, property, carbon, CGT, Income tax or corporation tax.

All we can hope for when the government take into account the commissions findings in the next budget, is that they use it to help create a more equitable tax system. But lets lose the notion that it will be used to produce a revenue neutral budget .

Breaking Down Redundancy Payments

Posted on | September 14, 2009 | No Comments

We’re introducing a redundancy section to our website to help explain a difficult and stressful topic.  We will of course be focussing on Tax issues associated with Redundancy, but will look at other parts also.

Firstly, we would like to introduce an overview of Redundancy and Tax.  Redundancy taxation is usually presented in a big pile on our plate, but we can break it down a bit to help understand it better.  This is shown as a graphic below, with the main pieces + one slice being:

• Statutory redundancy amount
• Revenue Exempt redundancy payments
• Taxable amounts (including Top Slicing Relief)

More about Redundancy

You can also find the Redundancy Overview here.  We will be adding further articles to our redundancy section going forward.

John
Red Oak Tax Refunds

Tax Commission inconsistencies

Posted on | September 7, 2009 | No Comments

Going through the Commission on Taxation report now and I’ll post some thoughts here.

Child Benefit v Maternity Benefit

First up, surprised to see the commission recommend some form of taxation of child benefit, but declare that Maternity Benefit should not be taxable.  Why is this?  Why are they given distinct treatments?

I’d appreciate your views as to why one should be taxed and not the other as that genuinely confuses me.  To my mind, it would seem that the commission has taken the view that its fine to get pregnant, just don’t have any children.

Commission on Taxation Report published

Posted on | September 7, 2009 | 2 Comments

Government approach to public consumption of reports findings

The commission on taxation report will be officially released today and it will be extensively covered in all medias.
There was initial talk that the findings would not be released and held for private use for the government in allowing them to make decisions in the next and following budget. But the approach eventually taken was to publish the report – indeed, more than that, they have gone to great efforts to leak it’s entire contents.

Why leak and publish the Report?

With over 250 recommendations to be published in the report,  the goverment will not be implementing all the proposals.  They also need to avoid emotive issues they could derail their budget proposals, embarass them or dislodge the government entirely ( a la the medical card fiasco in the 1st 2009 budget). so they have published and leaked the report to:

• Let the public draw their lines in the sand: What’s going to be emotive?  If it’s going to be highly emotive, they will look to discard it like some oily rag.
• Appear generous: the goverment can pick and choose from the report and appear to be making concessions to different groups.

Advance fortifications

So far three groupings have been effective in establishing their positions:

• Child Benefit: Groups have been established to protect Child Benefit from the chop.  These groups have spun out of the very large and formidable discussion groups on parenting websites such as Rollercoaster.ie and eumom.com, leading to websites such as childbenefit.info.  very organised and gaining a lot of press, the leaking of the commission will have highlighted this as a potentially exposive area that the government could do well to leave alone.
• Unions:  The union representive on the commission on taxation was the only one not to sign the final report.  It will be interesting to see how the government deal with the unions, but as their may be no acceptable middle ground.  The trick here for the government will be to avoid enormous union unrest.
• The Government: They have remained in the long grass watching the fortifications going up.  They will now be able to pick and choose their targets and avoid ambushes from previous budgets like that of the Medical card

what you should do?

We’re glad to see the report published as it gives us all a very deomocratic chance to respond.

If there is a recommendation in the report that you feel strongly about, then the government are presenting you with the opportunity to make your concerns known.  Do it before they make their decision and you could well influence their decision.

Don’t bin service charges tax refunds

Posted on | September 2, 2009 | No Comments

Are we throwing money in the bin by not claiming tax refunds for the cost of our waste disposal?

This is one of the more commonly claimed tax credits, but still a large % of home owners and renters miss out on this.

Very simply?  if you are paid any amount up €400 on waste disposal in a year, in the following year you can claim 20% of that amount as a tax credit.  That’s up to €80.

For us, we paid €30 a month last year to our bin company, which gives us a tax credit of €72 this year.  Easy money?

Waste disposal includes the bin collection service and even visits to the local dump.

And don’t forget that if you have not claimed this in the past, you can claim for the last 4 tax years, giving a potential refund of €320.  find out more about this in our Top Tax Tips

Maintenance Payments –How it affects your Income levy and PRSI

Posted on | August 25, 2009 | 1 Comment

Firstly, how maintenance payment is treated for Income Levy depends on whether you have voluntarily agreed to pay maintenance or if there is a legally enforceable agreement

Voluntary Payment: the spouse making the voluntary maintenance payment is not exempt from paying the income levy on that amount paid from their income.

The spouse receiving the voluntary maintenance is exempt from the income levy on the amount that they receive.

Legally enforceable maintenance payment: The spouse making the payment is exempt from paying the income levy on the portion of their income that is paid for maintenance to the spouse (no exemptions due in relation to the income levy on the payment of maintenance of children).

The spouse who received the payment is subject to the income levy on the portion of the maintenance that they receive themselves.  Again as above any part of the maintenance that is paid toward the children is not subject to the levy.

Just to note, where a separated couple who have a legally enforceable agreement have decided to be jointly elected as married with Revenue for Income Taxes purposes, the spouse making the payment is not exempt from paying the income levy on that amount for maintenance and the spouse receiving the payment is not subject to the income levy on the maintenance.

PRSI Refunds

A separated or a divorced spouse may claim a refund of PRSI on enforceable maintenance payments made to his or her spouse. The PRSI due will be re-calculated on the reckonable pay/income reduced by the amount of maintenance payment.

Any excess Income Levy or PRSI paid will be returned by claiming a refund at the end of each tax year.

Child Benefit – Proposed changes

Posted on | August 21, 2009 | 7 Comments

Taxation Commission – Messy Child Benefit changes?

We are all very glad for Child Benefit – at €166 per month per child (that’s nearly €2,000 a year tax-free), it’s an important part of most of our household Budgets.

But there is also the aspect that many who receive the child payment earn so much anyway, the question is asked why are they getting this additional free money. Could it be better spent? Can that money be distributed more equitably?

The Commission on Taxation’s job was to make suggestions across the spectrum of tax and social payments and Child benefit is proving to be one of the most vexing issues. But they will be recommending to the Government next week that Child Benefit is made taxable.

How would Taxing Child Benefit work?

in simple terms, this means you have an extra €2,000 of income per child subject to tax.

• Not paying Tax:  If you are not earning, or are not paying any income tax, then you will have no change to your income
• Paying 20% Tax on your pay: Then your pay will be reduced by€33 per month (that’s €166 times 20%) per child.
• Paying higher rate tax (41%): Then your pay will be reduced by €68 per month (being €166 times 41%) per child

So you probably still receive the €166 as normal, but your pay packet will be affected.

Is that it?

well it couldn’t be that simple, could it!

• Who gets taxed on it?  The mother or the father?  especially for unmarried couples or single parents, this could be a bunfight.  But even for married couples where one earns high and the other low, depending on who’s income it is deemed you could effectively play the system.
• Can it be taxed?  child benefit is for the child, to be spent on the child.  There is a question that this is illegal.

Just leave it alone

I think this could end up as an emotive, politically messy issue, much like the medical card issue last year. As dad to a near 2 year old, we have already become emotionally attached to this payment (although me a little more!)

I do think while fairer and more equitable, taxing child benefit or making it means tested would both end up messy. It’s going to get emotive with property taxes, carbon taxes and water rates also on the table, so leave us our Child Benefit as our comfort blanket while we get used to those.

Find out more

find out more about Tax Refunds and Top Tax Tips, including our Tax Refund Calculator at www.RedOakTaxRefunds.ie

Calculate my Mortgage Interest Relief

Posted on | August 17, 2009 | No Comments

So you have a new/existing mortgage or loan relating to your home and want to know how much you are due in mortgage interest relief. there are 3 questions you need to ask yourself in relation to this:

1. Have I an eligible loan?
2. Am I a First Time Buyer (FTB)?
3. What are the rates of relief?

We have looked at eligibility and FTB status before.  Now it’s time to calculate the Relief!

Non-First time Buyers

If you are a non-First Time Buyer (non-FTB), you can now claim interest relief of up to €450 a year if you single and €900 if you are married. This equates to €37.50 if you are single and €75 for those of you fortunate enough to have met the lass/lad of your dreams and married them.

now the boring stuff: how is this calculated.
Mortgage interest relief is granted on the interest portion of your monthly mortgage repayment. Say, for example you are paying €1,000 a month on mortgage payments. This is made up of capital payment (say €600) and interest payments (say €400). Depending on the amount of the loan, the term of the mortgage and the interest rate, the split between the capital and interest portions can vary from all of it being interest (on an interest only mortgage) or practically all of it being capital repayments (when you finally get to pay off the mortgage).

Important: mortgage interest relief is only available on the interest part of your monthly mortgage payment – not the whole amount

non-FTB mortgage interest relief gives you relief on the first €3,000 of interest on your mortgage at 15%, which gives you the €450 from above. You get to double that if you are married.

If you don’t know what the split is on your mortgage or will be on a new mortgage, ask your bank. Also, your bank will send you a statement after the end of the year stating how much interest you paid in the year.

First Time Buyers

The short of it: First Time Buyers (FTB’s) can receive interest relief of:

• in the 1st 2 years of a mortgage  up to €2,500 relief a year, or €208 a month
• In years 3-5 of a mortgage, up to €2,250 interest relief a year, or €188 a month
• in years 6-7 , the relief is €2,000 a year, or €167 a month
• This is doubled if married.

The long of it: For most mortgage holders, you will not get that much relief.  The interest relief above is based on paying €10,000 of interest on your mortgage a year (double if married).  The average mortgage holder you will be glad to know does not dish that amount of interest over to the bank.

Again ask your bank how much interest you currently pay on an annual basis to help you calculate the amount of interest relief due.  If you pay €5,000 a year, then you can take it your relief will be 50% of the limit above.

Further Information

So your loan is eligible. Next you need to check out if you are a first time buyer and then calculate how much relief you are due.

• Are you a First Time Buyer?
• How much Relief are you due?

For personal tax advice, contact us at Red Oak Tax Refunds.

Irish Banks on Takeover radar

Posted on | August 14, 2009 | No Comments

I see that a Canadian bank is in discussions with AIB (http://www.rte.ie/news/2009/0814/aib.html)

It is unsure whether the bank is interested in the whole group or just the US business.  If it were interested in the whole group, this could have very significant consequences.

Not least, this could have implications for NAMA.  We have seen how the dutch owned ACC Bank have remained outside of NAMA and are effectively working against NAMA by instigating proceedings to get these toxic assets off their books.  How would a new owner of a large Irish bank view the workings of NAMA?

However, it’s would not the first time the irish business media have presented red herrings of this type to us, so we’ll just have to wait a little longer to see if this unnamed bank comes forth

Mortgage Interest Relief – are you a 1st time Buyer?

Posted on | August 14, 2009 | 1 Comment

So much changed for mortgage holders in the April 2009 emergency Budget. Many who previously had mortgage interest relief lost it, and for others the amount they received changed.

We have already looked at eligiblility in a previous post (Here). Once you have checked that you are eligible, the next step is to see if you are deemed as a first time buyer or not a first time buyer. This has a huge effect on the amount of interest relief you could receive, so make sure you know the difference!

Am I a first time buyer (FTB)?

Higher rates of mortgage interest relief are available for homeowners who are classified by Revenue as first time buyers (FTB). This term can be quite ambigious – lets look at some examples of who are first time buyers and you will see what we mean.

Example 1: Simple example

Des bought a home in 2005 on his own and has never previously had a mortgage. Yes, Des is a first time buyer.

Example 2: Moving house

Schanelle bought a home in 2005 on her own and has never previously had a mortgage. In 2008 she moved house. Schanelle is still considered a first time buyer. It doesn’t matter how many times Schanelle moves house as she will still receive first time buyer mortgage interest relief for 7 years from the date of her first mortgage.

Example 3: Different FTB status for couples

In this example, Schanelle bought the second house in 2008 with her partner Dave. Dave had never previously had a mortgage and is considered a first time buyer. So Dave will receive first time buyer mortgage interest relief for 7 years from 2008 until 2015, 3 years after Schanelle loses her first time buyer status in 2012.

Example 4: Previous Investment property

Niamh bought a house in 2005 as an investment property. As such, she was not eligible for mortgage interest relief, as it was not her home. In 2008 she bought an apartment as a home. Niamh is considered a first time buyer. She will receive first time buyer mortgage interest relief for 7 years from the date of her first mortgage on her home.

Example 5: Previous mortgage abroad

Frances moved from the UK to Ireland in 2005 and bought a new home. She had previously had a mortgage on a home in the UK for 15 years. Frances is considered a first time buyer for 7 years from 2005, as homes abroad are not taken into account when deciding your Irish first time buyer status.

Finally

If you are not sure if you are a first time buyer or not, get in touch with the Revenue TRS section in Limerick.  They are very good to deal with.

If you would like professional help in this matter, you can contact us here in Red Oak Tax Refunds, where we are also very helpful and friendly!

Mortgage Interest Relief – is my loan eligible?

Posted on | August 10, 2009 | 2 Comments

Following the emergency budget in April 2009, a number of changes were made to mortgage interest relief. These affected

• Who is eligible for mortgage interest relief
• How much relief you will get

We’re going to look at who is eligible for mortgage interest relief here.  In later posts, we will look at how much relief you are due, including the important question: are you a first time buyer

Who is eligible?

Tax Relief is now only available for the 1st seven years interest paid on a qualifying loan on a property. ‘Qualifying loan’ is a Revenue term and for most of us this is the mortgage we took out to buy the property. But other qualifying loans are:

• Loans or mortgage increases for repairs and improvements to your home
• loans or mortgages of your former spouse or a dependent relative where you pay the mortgage.

There are some loans that are not considered as ‘qualifying loans’ such as:

• any loans or additions to the mortgage, where the money was not spend on your home.  for example car loans or re-financing.
• Also, switching mortgage provider does not re-start the loan as a year one qualifying loan, it’s only if the new mortgage is for a new home.

Eligibility in action

Let’s have a look at some of the more common

Example 1:
John and Mary bought their home in 1990 and took out a mortgage payable over 25 years, with no changes since then. Following the changes in the budget, they are no longer eligible for mortgage interest relief as the mortgage has been running for more than 7 years.

Even if, in 2006, they moved the mortgage to a new lender, Revenue will look to see what the initial reason for the loan was and if they deem it to be more than 7 years old then it is no longer eligible.

Example 2:
Patrick and Jane bought their home in 1990 and took out a mortgage payable over 25 years. In 2006 they built an extension for €75,000 paying €25,000 in cash and increasing their mortgage by €50,000.

In this case, their initial mortgage no longer gets mortgage interest relief, but the interest payable on the top-up of €50,000 is eligible for mortgage interest relief for 7 years until 2013.

Example 3:
James bought a home in 1990 and took out a mortgage payable over 25 years. In 2005 he moved to a new home, taking out a new mortgage.

James will get mortgage interest relief on his new home for 7 years from 2005 to 2012.

Example 4:
Yvonne bought a home in 1990 and took out a mortgage payable over 25 years. In 2005 she increased her mortgage by €40,000 to buy the car of her dreams and to pay for a driving holiday.

Even though the mortgage top-up was within the last 4 years, this is not an eligible loan therefore no mortgage interest relief is available.

Further Information

So your loan is eligible. Next you need to check out if you are a first time buyer and then calculate how much relief you are due.

• Are you a First Time Buyer?
• How much Relief are you due?

For personal tax advice, contact us at Red Oak Tax Refunds.

DIRT Tax refunds for over 65’s

Posted on | August 4, 2009 | 1 Comment

If you are over 65, you may not need to pay DIRT (Deposit Interest Retention Tax) on your deposit income.

Exemption limits:

As of 2009, if you earn less than €20,000 as a single person, or €40,000 as a married couple then you are exemption from DIRT tax.
This exemption is increased for each dependent person by amounts from €575 per dependent person.

For many, you will know in advance that your income will be within the exemption limit and you can arrange to have the deposit interest lodged direct to your account exempt of income tax.

But if this was not arranged, you can still look arrange for a refund of the DIRT tax after the end of the year. In 2007 for example, 920 such claims were made, with an average refund achieved of over €2,300.

Interest from financial institutions such as Banks, Credit Unions, the Post Office and Building Societies are eligible to this exemption.

why not contact us for a full Tax Refund evaluation for the last 4 years.

Tax Refunds for Management Fees

Posted on | July 30, 2009 | No Comments

Are you Renting or a Home owner and paying management fees?

Not all of your apartment or home management fees are worth a tax credit, but they could still be worth a few quid.

If your management fee includes the cost of waste disposal or a charge for water or sewerage, then you could be able to claim that portion of the management fee against the service charges tax credit.

Service charges tax credit allows you to claim 20% of the cost of these services up to a maximum of €400 – giving a tax credit of €80.

However, you will need your management company to bill separately for these charges, or the costs will not be allowed by Revenue.

And given that you can claim back 4 years, that could be worth €320.  Well worth talking to your management company about!

Medical Insurance tax credit

Posted on | July 29, 2009 | No Comments

Probably the least understood of the common Tax Reliefs is the Medical Insurance Tax Relief – so many people miss out on this tax relief!

How does it work?

If you pay for Medical Insurance to an Insurer direct or through your employer, you will receive this relief at source. i.e. your premium is reduced, so you pay a lesser amount.
However, if your employer pays for your medical insurance, they pay the full premium. but you can then separately claim the tax relief on this. The tax relief is given at 20%.

If you have not received this tax credit in the past, you can claim for the last 4 years.

Below are a few examples of Medical insurance tax credit in operation.  Be warned:  it is one of the more complicated reliefs!

Example 1
Your employer pays for the medical insurance for you and your family. This amounts to €2,000. No tax relief is given at source, but you are allowed an additional Tax Credit of €400 (being €2,000*20%).

In other cases, the employer splits it 50:50 with you.
Example 2
An employer discharges the full amount of the premium and recovers 50% of the premium (net of TRS) from the employee.
Assume the Gross Premium is €1,000
TRS (Tax Relief at Source) €200
Net Premium € 800
Recovered from employee €400

The employer pays over €800 to the authorised insurer (€400 of which is recovered from the employee) and pays €100 TRS (amount attributable to the €400 paid by the employer) to Revenue.

The taxable benefit (notional pay) is:
Cost to employer €900 (€800 premium paid + €100 TRS paid)
Less amount made good by employee €400
Notional Pay €500

The employee is entitled to a tax credit of €500 @ 20% in his or her certificate of tax credits. He or she has already received credit by way of TRS of €100 by paying the net (of TRS) premium of €400 direct to the employer.

More information

Find out more about Tax reliefs and Medical Insurance tax credit in our Top Tax Tips

DWT Dividend Tax Exemption for Over 65’s

Posted on | July 23, 2009 | No Comments

What is DWT
DWT, or Dividend Witholding Tax, is deducted from dividends paid by Irish companies. If you are in receipt of Irish dividend income, DWT is deducted at 20% – this is taken out of the dividend you have received, which you can confirm in your dividend certificate. This 20% is then used as an offset against your income tax liability.

Over 65’s Exemption
for Over 65’s as of 2009, if you earn less than €20,000 as a single person, or €40,000 as a married couple then you are exemption from Income tax.
This exemption is increased for each dependent person by amounts from €575 per dependent person.

How does it work?
If your total income is below the income tax exemption limit, then you are due a refund of the DWT deducted. Even where your income is in excess of €40,000, you may still be due a partial refund, depending on how your income is split between dividends and your other income.

Refunds of tax on dividends can be substantial, so ensure that your taxes are in order and you have properly accounted for your dividends. If you have further questions on your taxes or require a tax assessment, contact us here.

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Welcome to the Red Oak Tax Refund Blog, where we will discuss money matters, tax and in particular tax refunds relating to PAYE employment in Ireland. If you have any topics you would like discussed, send us a mail to refunds@redoaktaxrefunds.ie and happy reading!.

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