I am informed by the Revenue Commissioners that, according to the information available to the inspector of taxes, the taxpayer will not have an income tax liability in the current tax year as his total income is less than the exemption limit of £15,000 which applies to married taxpayers aged 65 and over.
I am further informed that where a person is in receipt of taxable payments from the Department of Social, Community and Family Affairs, such as old age pension, the payments are made without tax being deducted. In order to collect the tax due on such payments, it is necessary to reduce the recipient's tax-free allowances by an amount equal to the payments he or she receives. In this case, when the taxpayer's estimated social welfare income is deducted from the exemption limit figure, his remaining tax-free allowance is higher than his other taxable income. Consequently no liability to tax arises.
The taxpayer is financially better off under the exemption limit rules than if he were to avail of the tax-free allowances appropriate to a taxpayer of his age, marital status etc. Under the exemption limit rules, he does not have to pay income tax. Under the tax-free allowances system, he would have an income tax liability of approximately £260.
