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Tax Code

Dáil Éireann Debate, Tuesday - 5 November 2013

Tuesday, 5 November 2013

Questions (181)

Róisín Shortall

Question:

181. Deputy Róisín Shortall asked the Minister for Finance the sources of unearned income that are counted in the determination of whether a person exceeds the €3,174 threshold applied by Revenue for the purposes of defining a chargeable person; the way interest from savings is counted in this process; if interest from savings exceeding €3,174 in a year would mean that the person is considered a chargeable person; and where rental income and-or dividend payments in a year do not exceed €3,174 per year should interest from savings be added in determining whether or not a person is considered a chargeable person or is it exempt in these circumstances; and the way married couples are treated in these arrangements. [46215/13]

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Written answers

Under the Tax Acts, a chargeable person is a person who is chargeable to tax on income. However, in the case of income tax, an individual will not be regarded as a chargeable person where:

- the individual is in receipt of PAYE income only; or

- the individual is in receipt of PAYE income and has small amounts of other income that is being fully taxed through the PAYE system or has been fully taxed at source.

In all other cases, a person who is chargeable to tax on income is a chargeable person and must file a tax return through the self-assessment system.

Revenue has determined that the amount of non-PAYE income which can be taxed in this way is €3,174 per person chargeable to tax.

The €3,174 limit applies to all non-PAYE income from whatever source–for example, deposit interest, rental income and dividends–and refers to the total of such income. That is, all such income should be added together for the purposes of determining whether the non-PAYE income exceeds €3,174.

Therefore, where the total non-PAYE income on which a person is chargeable to tax:

(a) does not exceed €3,174, and

(b) has been subject to tax through the PAYE system (or has been fully taxed at source),

that person is not a chargeable person.

Married couples, who are jointly assessed, are entitled to earn €3,174 before the spouse on whom the income is assessed becomes a chargeable person. However, where a married couple opts for separate assessment or single treatment each person will have a limit of €3,174.

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