Written Answers. - Tax Regime.

Mary O'Rourke

Question:

152 Mrs. O'Rourke asked the Minister for Finance if he will give details of the tax regime which pertains to a widow or widower vis-à-vis a lone parent in similar family circumstances. [16841/96]

The widowed person's personal allowance currently stands at £3,150 compared to £2,650 for a single person. An additional allowance of £2,150 is available to a widowed person who has dependent children. The lone parent allowance available to other persons is £2,650. This means that the personal allowances of both a widowed person with dependent children and other lone parents are currently £5,300, the same as the basic allowances for a married couple. Lone parents and widowed persons (except in the year of bereavement) receive the single person's standard tax band, currently £9,400.

Aside from the personal allowances, widowed persons enjoy some other special tax treatment over single persons, including lone parents. In the year of bereavement a widowed person retains married tax treatment including double rate bands. In addition, a special transitional allowance was introduced in 1991 for widowed parents with dependent children to operate for the first three years following bereavement. This allowance, which is provided in addition to the above allowances, is £1,500 for the first tax year following bereavement, £1,000 for the second year and £500 for the third tax year.

The ceiling on mortgage interest relief for widowed persons currently stands at £3,600 as compared to £2,500 for a single person. In addition, where a widowed person is in private rented accommodation and is under 55 years of age, a tax free allowance of up to £750 per annum at the standard rate of tax is available, compared to £500 for a single person. If the widowed person is aged 55 or over, the allowance is up to £1,500 per annum at the taxpayer's marginal rate of tax, compared to £1,000 for a single person.
The position in relation to widowed persons is that certain allowances are higher in recognition of the fact that widowed persons may have taken on extra responsibilities in marriage which do not necessarily cease upon the death of a spouse. In addition, the extra allowances are granted on compassionate grounds.
The tax treatment of widowed persons and lone parents has been reviewed on a number of occasions and the existing tax treatment is considered to be reasonable.