George Lee
Ceist:60 Deputy George Lee asked the Minister for Finance if he will provide confirmation that the allowance of a person (details supplied) is not taxable; and if he will make a statement on the matter. [42395/09]
Amharc ar fhreagraThursday, 19 November 2009
Ceisteanna (64)
Freagraí scríofa
The position is that the guardian's payment, whether contributory or non-contributory, is taxable. However, such a payment is not treated for tax purposes as income of the guardian but rather as income of the child in respect of whom it is paid. As regards the extent, if any, to which taxation actually arises in a given case, this depends on the nature and level of income of a child and the level of his or her tax credits for a tax year. For example, if a child has no income other than the guardian's payment, then the basic personal credits in force may, in most cases, be sufficient so as to ensure that there is no tax to be paid by that child in respect of the guardian's payment applicable to him or her.
In contrast, if a guardian's payment is payable in respect of a child and that child has other income such as rental income for example, then both the guardian's payment and the rental income would constitute the child's income for tax purposes. In this scenario, the child may, depending on the level of his or her total income, have a tax liability.