Tax treatment of mortgage payments in lieu of child maintenance

Hammerhead1

complicated one so hoping for advice. In the settlement stage of divorce proceedings. I owned the family home pre marriage. Marriage has broken down and I left 2 years ago. The mortgage is in my sole name . As part of the proposed settlement I will be paying the full mortgage for the next 14 years and at the end of it the ex gets 50% equity . She can’t buy me out . My question is around tax . I will be paying the full mortgage and a cash amount on top of this . Will the mortgage portion be classified as spousal maintenance. If so it seems I can get tax relief on the mortgage payments . If it’s classified as child maintenance then how does it lower as each child becomes an adult as I have a number of kids . Has anyone found themselves in a similar situation?

3DataModem

This is not complicated, and is covered in the legislation thankfully.

As long as the payment is "legally enforceable" then it is classified as a spousal payment, and that can include payments made on behalf of the spouse (e.g. rent, mortgage, school fees, etc).

If you see this page on revenue website it specifically says "You may be legally required to regularly pay an amount on behalf of your former partner, such as a mortgage payment. This is treated as a legally enforceable maintenance payment to your former partner."

Hammerhead1

thank you for your response . I could not find this on revenue . I did find a section on the treatment of legally enforceable maintenance. It’s states that legally enforceable child maintenance has no tax relief but that payments that do not benefit the child do have tax relief . I guess my query is the provision of housing directly to the benefit of the child . In my instance as my ex spouse gets to live there for free I would argue this constitutes spousal maintenance. I will need to wait and see the divorce agreement/ deed .

Hammerhead1

don’t think I can get the single person tax credit as I am not the primary carer

3DataModem

https://www.boards.ie/discussion/comment/122716677#Comment_122716677

Here you go:

https://www.revenue.ie/en/personal-tax-credits-reliefs-and-exemptions/marital-and-civil-status/maintenance-payments-relief/legally-enforceable-maintenance-payments.aspx

Hammerhead1

the primary claimant has to give over the tax credit . She won’t do that even though it’s off no value to her as she is not working

SureYWouldntYa

https://www.boards.ie/discussion/comment/122717134#Comment_122717134

If she's not working then it is of no benefit to her, even if she was working part time her own credits would likely leave her with no tax liability and she would not need the credit

If she really isn't willing to just give it up then greasing her palm could leave both of you better off

Hammerhead1

thank you for the input . Hopefully I can persuade her. Seems ridiculous that you need perm from the primary claimant to get the credit