Vol. 528 No. 3
116 Mr. N. Ahern asked the Minister for Finance if he will clarify the situation regarding payment of legal fees paid in connection with the break-up of a marriage or a separation; if these fees are tax deductible; the way in which maintenance fees paid or due are treated; and if he will make a statement on the matter. [30303/00]
Legal fees paid in connection with the break-up of a marriage are not tax deductible.
If maintenance payments are made under a maintenance arrangement – see below – the spouse paying maintenance can claim a deduction for those payments made in the year of assessment for the benefit of the other spouse. The spouse to whom the maintenance is paid is taxable under case IV, Schedule D, in respect of such maintenance payments received. Where an individual can claim a tax deduction for the maintenance payments, he or she is not entitled to claim the married persons tax allowance.
A tax deduction cannot be claimed in respect of maintenance payments made for the benefit of a child.
Where maintenance payments are not made under a maintenance arrangement, the person making the maintenance payments cannot claim a tax deduction for those payments and the recipient is not taxable on them. In such circumstances the married person's allowance may be claimed.
