The tax treatment of separated spouses relative to that which would apply in the case of a married one-earner couple who remain married depends on the circumstances which apply in each case and it is not possible to generalise in the abstract.
However, it may be useful to set out in broad terms the position with regard to the tax treatment of separated persons. While, in general, separated couples are treated for tax purposes as if unmarried, they may, where a legally binding maintenance arrangement is in place, elect to be treated for tax purposes as if the separation had not taken place. However, the election to be treated for tax purposes as if married is not a right of one spouse but rather is a joint election of both spouses.
The general position in the case of legally enforceable maintenance agreements is that where the couple are treated for tax purposes as if unmarried, a tax deduction for maintenance payments for the benefit of his or her spouse is granted to the paying spouse but the payments are taxed in the hands of the receiving spouse. However, if the couple jointly elect to be treated for tax purposes as if the separation had not taken place, then the payer does not receive a tax deduction for the maintenance payments and the receiving spouse is not taxable on them.
On the other hand, non-legally binding maintenance payments are not taxable in the hands of the receiving spouse but the paying spouse cannot claim a tax deduction for them. Maintenance payments in respect of children are not taxable in the hands of the children or the receiving spouse. The effect of this is that the payments are treated the same way as if the taxpayer was providing for the child out of his or her after-tax income. This is in line with the tax treatment of all other parents, where the cost of maintaining their children is not tax deductible.
As regards pension splitting, the facts and circumstances of any particular case would have to be examined to determine whether part of one spouse's pension payable to the other spouse is a legally binding or non-legally binding maintenance payment for the benefit of that other spouse.
In relation to the Murphy case to which the Deputy refers in the details supplied, the Supreme Court held that it was unconstitutional to treat a married two earner couple less favourably for tax purposes than two single persons living together and on identical incomes to the married couple. In my view, the tax arrangements relating to separated spouses do not breach the principle established in the Murphy case.