Revenue Note for Guidance

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Revenue Note for Guidance

1031Q Maintenance where relationship between cohabitants ends

This section provides that payments made under a maintenance arrangement by a former cohabitant to the other qualified cohabitant of that relationship will be —

  • payable without deduction of tax,
  • deductible in computing the total income of the payer, and
  • chargeable to income tax in the hands of the recipient.

(1) Subsection (1) contains the definitions to be used in this section.

A “maintenance arrangement” is defined as any legally enforceable arrangement made by a court under section 175 of the Civil Partnership and Certain Rights and Obligations of Cohabitants Act 2010.

A “payment” includes a part of a payment

(2)(a) Subsection (2)(a) provides that this section applies to payments made, directly or indirectly, by a former cohabitant, under or pursuant to a maintenance arrangement relating to the cohabiting relationship which has broken down.

(2)(b) Subsection (2)(b) provides that any payment which —

  • is made under a maintenance arrangement, and
  • is not for the benefit of a third party,

is treated as being for the recipient’s benefit. This applies whether or not the payment is conditional.

(3) Subsection (3) states that where the payment is for the benefit of a qualifying cohabitant —

  • the person making the payment is not entitled to deduct and retain income tax from the payment,
  • the person receiving the payment is chargeable to tax under Case IV of Schedule D, and

(4) the person making the payment is entitled, on making due claim, to deduct the payment in computing his/her total income for tax purposes for the year in which the payment is made.

Subsection (4) provides that where a former cohabitant is claiming a deduction of the amount of maintenance from total income, this section applies the general income tax provisions governing—

  • deductions allowed in ascertaining taxable income and provisions relating to reductions in tax (section 458),
  • general provisions relating to allowances, deductions and reliefs (section 459), and
  • the rate of tax at which repayments are to be made in respect of such a deduction (section 460).

Relevant Date: Finance Act 2021