I have been advised by the Revenue Commissioners that, on the basis of their recently completed return of income, the taxpayers' income for the current year, 1990-91, will exceed the relevant exemption threshold of £7,500. While they are not entitled to exemption from income tax, they are entitled to a measure of marginal relief, as their income does not greatly exceed the threshold.
Where marginal relief applies, the taxpayer is given an allowance equivalent to the tax exemption limit, which is higher than the normal tax-free allowances, and the highest tax rate of 53 per cent is applied. The effect of the procedure is to reduce the taxpayer's overall liability for the relevant year.
An amended certificate of tax-free allowances on this basis will be issued to the husband shortly. An amended certificate to cover her retirement pension was issued to the wife on 25 May 1990.
An underpayment of £116 arose for 1987-88 as the old age pension for that year was under-assessed. The arrears are not being recouped at present.