Tax codes and civil partnership

Civil partnerships and tax

The tax provisions that apply to married couples are now available to civil partners. The Civil Partnership and Certain Rights and Obligations of Cohabitants Act 2010 came into effect on 1 January 2011. On registration of a civil partnership, civil partners will be treated in the same way as spouses under the tax and social welfare codes.

The Finance (no. 3) Act 2011 made the necessary taxation changes. The Act was enacted on 27 July 2011 but the changes apply for the 2011 year of assessment.

The tax changes introduced by the Act mean that civil partners are entitled to the same rights as married couples in financial matters such as inheritance, property, pensions and maintenance if the relationship breaks down. Your civil partnership does not have to be registered in Ireland. Some legal relationships between same sex couples that are recognised by a foreign state (such as marriage, civil union, civil partnership) are recognised by the Minister for Justice and Equality. Any partnerships on the Minister’s list are recognised by Revenue for taxation purposes.

You find out more about how people in a civil partnership are taxed in our document Taxation of married people and civil partners and on the Revenue Commissioner’s website.

If your civil partnership breaks down and is dissolved, protection orders, maintenance orders and pension adjustment orders may be made in the course of court proceedings for the dissolution of civil partnerships in the same way as such orders may be made in judicial separation and divorce proceedings. Currently only payments made under maintenance agreements ordered by a Court are allowable as a deduction against your income tax liability. Maintenance payments made to children are not deductable.

You can find out more about the tax implications of different maintenance arrangements.

Cohabitants and tax

The Civil Partnership and Certain Rights and Obligations of Cohabitants Act 2010 gives protection to a financially dependent person at the end of a long-term cohabiting relationship. It also gives a cohabiting partner rights over a deceased person’s estate. However the Act does not give any cohabiting couples the same tax treatment as married couples or civil partners.

The only income tax provision for cohabiting couples is tax relief for court-ordered maintenance payments made to a financially dependant former cohabitant on the ending of a long-term cohabiting relationship. It is important to note that to qualify for tax relief the maintenance order must have been determined by the court rather than being an informal arrangement between the former cohabitants.

In addition if a former cohabitant is granted redress by the courts through the transfer of an asset, this transaction will not now be liable to stamp duty or capital acquisitions tax and the donor of the property does not have a capital gains tax liability. Previously the former cohabiting couple would have been deemed unconnected and subject to full acquisitions tax, stamp duty and capital gains tax.

You can read more about the rights of cohabitants in Revenue’s FAQ document.