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Ireland Tax: Separation, Divorce, And Your Tax Position

During a turbulent time of marital separation, you need a few simple steps to make life easier and update your tax position.

Pick A Date – sounds easy, but sometimes not that clear to know the exact date of separation. You need to have a date so that when you contact Revenue to let them know, you have the date ready. There is no form just for this, so just call your local tax office and tell them over the phone giving your PPS number, or drop them a line if that is easier for you. (You will show the change of marital status on your next tax return)

Agree Arrangements On The Main Items Relating To Money – Maintenance payments to and from spouses/children, loan repayments and who is paying the bills. In time this will be formalised by your solicitor and as this can take some time, you need to confirm to Revenue that the separation is likely to remain permanent so that the tax code can be changed.

Know How You Are Assessed – Joint assessment is the most common, but you may be separately assessed and still married. Single assessment is usually but not always the route to take after the date of separation.

Be Aware Of What Is Taxable – Maintenance payments to spouse and children. Maybe there is nothing agreed for some time? Voluntary payments whereby there is not yet a legally enforeceable arrangement under a court order, are NOT taken into account when calculating either spouses tax. When there is a legally enforceable arrangement in place, the spouse making the payment to the other spouse is entitled to a tax deduction and the spouse receiving the payment is taxed on the amount. Any maintenance paid to children is not taxable and no tax deduction is therefore available for that portion of the maintenance.

Have a question? Contact Frances Brennan.

Your comments are always welcome!