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Dáil Éireann díospóireacht -
Wednesday, 27 Oct 1982

Vol. 338 No. 1

Ceisteanna—Questions. Oral Answers. - Taxation of Maintenance Payments.

33.

asked the Minister for Finance if he will consider the procedure under which maintenance paid by a husband to his separated wife as per a separation agreement is doubly taxed, that is, as husband's income and as wife's income; and if he will make the same conditions apply as now apply in cases where maintenance is paid subsequent to a court order and only taxed once.

Maintenance payments made by a husband to his separated wife under a separation agreement are not doubly taxed. Where maintenance payments are made under a deed of separation, the spouses are both taxed as single persons and each is accorded the single person's allowance and the single rate bands. The payments are regarded as annual payments and are made under deduction of tax. The wife, if her total income is such that she is not liable to tax, may claim a repayment of the tax deducted. In effect, the husband is allowed full relief on the gross amount he pays the wife, and the wife is charged to tax on the same amount.

Where the payments are made under an order of the court, they are not regarded as income of the wife for tax purposes. The husband is charged to tax without any deduction for the payments made to the wife. He is granted the married person's allowance provided the maintenance payments constitute the wife's main income, and he is taxed on the single rate bands.

The question of achieving greater uniformity in the income tax treatment of maintenance payments by a husband to his separated wife is being considered at present.

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