Tax relief on under-paid maintenance payments

Katzi

Another question to throw out there regarding maintenance payable to an ex-spouse. (Not child maintenance)

Maintenance payments in Ireland are tax deductible. What happens if the payer decides not to pay the total amount of maintenance due? Are they still allowed claim tax relief on that.

For example - assume a flat 20% income tax rate to keep this really simple.

Someone is entitled to €10,000 pa maintenance gross (which works out at €8,000 net). But their ex-spouse only decides to pay them €3,000 pa. In this case, is the payer allowed claim this €3,000 against tax?

It would mean the recipient who was supposed to get €8,000 net ends up with only €3,000 from which they have to pay tax - ie further compounds their loss.

If any legal head out there knows the answer to this I would be really interested. Many thanks.

Victor

I imagine they can only claim for what has been paid, not for what was meant to be paid.

The recipient spouse would have very little, if any, liability on €3,000

Katzi

thanks for that. But it is more a matter of principle I am trying to establish.

Clearly the payer could only claim tax relief for what they paid, but the question is are they entitled to claim tax relief at all on this when they are underpaying the recipient. Increase these figures things look very different. Maintenance due of €50k, Payer with income of €150k. Payer supposed to be left with €100k gross but decides to only pay €10k maintenance. In this case it would seem very wrong if the recipient had to then pay tax on the €10k they get. See what I am getting at? I am just trying to establish the actual legal/tax position.

Alan Shore

The tax relief is based on the amount paid.

The tax code is not interested in the fact that they have not paid €40,000, that is a matter for the courts as its legally enforceable!