Any person or married couple whose total income from all sources is less than or equal to the exemption limit for a tax year will not be liable to tax on that income for that year. For persons aged 65 years or over, the age exemption limits for 2004 are as follows:
Status
|
Exemption Limit
|
Single / Widowed Person
|
€15,500 plus €575 for each of the first two qualifying children and €830 for the third and each subsequent qualifying child.
|
Married couple
|
€31,000 plus €575 for each of the first two qualifying children and €830 for the third and each subsequent qualifying child.
|
A qualifying child is a child who is under 18 years at the start of the year of assessment or, if over 18 years, is in full-time education or is permanently incapacitated either mentally or physically from maintaining himself or herself. Other than the increase in respect of children, there are no further additions to the age exemption limits.
However, any individual whose total income from all sources is over the exemption limit, but does not exceed twice that limit, may qualify for marginal relief taxation which is applied at a rate of 40%. In simple terms, an individual whose total income falls within the marginal exemption limits pays the lesser of tax due having regard to the marginal exemption formula and tax due having regard to normal tax credits and rates bands.