There is no restriction on tax relief on covenants to a permanently incapacitated parent. The person receiving the covenant will, of course, be chargeable to tax on his or her total income.
A housekeeper allowance of up to £7,500 may be claimed as a deduction from taxable income by a taxpayer, who is permanently incapacitated or whose spouse is permanently incapacitated throughout the tax year, in respect of the cost of employing a person to care for the incapacitated person.
Furthermore, a taxpayer may obtain relief in respect of expenses incurred on behalf of a parent where the taxpayer concerned is entitled to a Dependant Relative Allowance in respect of the parent concerned i.e. where (i) the taxpayer maintains the parent and (ii) the parent's income does not exceed a specified amount i.e. £4,400 for the current tax year.
This relief may include relief in cases of serious illness where a qualified nurse is engaged by a taxpayer on the advice of a medical practitioner to provide constant nursing care for a parent in the parent's home. Medical certification, details of the qualification of the nurse and a breakdown of the payments made would be required where tax relief is claimed. Further details of this relief can be obtained, if required, from the taxpayer's inspector of taxes.
Relief is not available in respect of any expenditure which has been or is eligible for reimbursement, for example, by the VHI, health board or by any other body.