Dáil Éireann díospóireacht -
Wednesday, 6 Nov 1991

Vol. 412 No. 2

Written Answers. - Tax Allowances.

Ivan Yates

Ceist:

66 Mr. Yates asked the Minister for Finance if he will outline the situation in relation to the claiming of allowances for cohabiting couples as opposed to married couples; whether there is any difference between the two in terms of obtaining joint mortgage relief or in terms of any other personal allowances; and if so, if he will specify the differences and the circumstances that define non-marital situations.

Minister for Finance (Mr. A. Reynolds)

I assume the Deputy is referring to the income tax treatment of married as against unmarried couples. Tax treatment in this area reflects the general law relating to marriage. A married couple is entitled to the married personal allowance, which is double that applicable to a single person, and to double the rate bands applicable to a single person, as well as to mortgage interest relief up to a maximum of £3,200 per annum. With the exception of the PAYE and PRSI allowances, there is general entitlement to the transfer of unused allowances from one spouse to the other, assuming the couple are taxed under the aggregation basis of assessment.

As a cohabiting couple are not married, each partner is treated as a single person for tax purposes. Each partner is, therefore, entitled only to the same personal allowances, rate bands etc., as are available to a single person. Mortgage interest relief is available to each partner, up to a maximum of £1,600 per annum, in respect of the amount of interest actually paid by that partner. There is no entitlement to the transfer of unused allowances from one partner to the other. Premiums paid on insurance policies taken out on the life of one partner by the other do not qualify for tax relief.