Maintenance payments tax treatment

[Introuble83]

I am close to reaching settlement terms of my divorce . In short I will be paying the full mortgage on the family home for the next 14 years and paying an additional 500 cash per month . After the 14 years the equity will be shared 50/50. The property was purchased by me solely pre marriage . My query is can the mortgage payments be classified as maintenance not specified as child maintenance. Maintenance payments for children are not tax deductible but payments which relate to the spouse are. In this instance the 15k yearly mortgage payments would be tax deductible for me and treated as taxable income for her . I cannot get any clarification around this .

 

[ClubMan]

If the mortgage payments are legally enforceable maintenance payments under the divorce agreement then you should be able to claim tax relief on them.

Legally enforceable maintenance payments

This section explains the tax treatment of legally enforceable maintenance payments

www.revenue.ie

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.

Tax treatment of legally enforceable maintenance payments​

...

You can claim tax relief on the amount you have paid for the benefit of your former partner.

However I don't know if the fact that you stand to benefit from half the property down the road impacts this. I don't think that it does but I am not a tax expert.

While your solicitor is unlikely to be a tax expert either, have they been able to offer any opinion on this?

 

[Introuble83]

If the mortgage payments are legally enforceable maintenance payments under the divorce agreement then you should be able to claim tax relief on them.

Legally enforceable maintenance payments

This section explains the tax treatment of legally enforceable maintenance payments

www.revenue.ie

However I don't know if the fact that you stand to benefit from half the property down the road impacts this.

While your solicitor is unlikely to be a tax expert have they been able to offer any opinion on this?

They were very hesitant to provide any advice on this and recommended I speak to a tax consultant

 

[ClubMan]

Ok, so the key question is whether or not the fact that you effectively maintain an interest in the property (insofar as if/when it is eventually sold further down the line the proceeds will be split 50:50 between you and your ex spouse) impacts your eligibility for tax relief on mortgage repayments in the meantime? (Or if that relief might be clawed back in some way perhaps?)

I can't seem to find anything conclusive on this question. And even ChatGPT advised "get advice from a tax expert".

You might also want to find out what the tax treatment will be if/when you get your 50% cut of the property sale down the line. E.g. might you be liable for CGT on your share given that it wasn't your PPR? Or might you get PPR relief because you were providing accommodation for your ex/and child(ren?)?