Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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Question 85: To ask the Minister for Finance, in view of the fact that the one-parent family tax credit can be withdrawn on the basis that a person is living with another person as man and wife, if he will explain, when a person does not wish to declare themselves to be living with another person as man and wife, the criteria used by the Revenue Commissioners to make that decision on their behalf; the reason a person can be considered as a wife - or husband, in the case of a man - by the Revenue Commissioners for the purpose of withholding a one-parent family tax credit, while the same person will not be granted the status of wife or husband for the purposes of inheritance tax and other taxation matters. [7921/11]

Michael Noonan (Limerick City, Fine Gael)
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Section 462 of the Taxes Consolidation Act 1997 provides for an additional credit to be granted to a person who proves that they have a qualifying child residing with them for the whole or part of the tax year.

A qualifying child is a child who is

- under 18 years old at the beginning of the tax year, or

- if over 18 years old at that time, in full-time education (including an apprenticeship), or

- permanently incapacitated by reason of mental or physical infirmity and became incapacitated before the age of 21 or while in full-time education, and who is either the child of the person or is in the care of and maintained by the person at his or her expense for all or part of the tax year.

The credit is designed to recognise the special circumstances and additional costs involved in a lone parent situation. For this reason the additional credit is not available to spouses who are residing together or to a man and woman living together as man and wife.

Where a dispute arises as to whether a person is entitled to the credit, Revenue staff examine the case based on the facts and information available to them. Where a taxpayer is dissatisfied with a Revenue decision he or she can appeal in the first instance to the Appeal Commissioners and then to the courts.

In addition to a person's statutory rights of appeal, every person has a right to seek a review of Revenue's handling of his or her tax affairs, or of decisions made by a Revenue official. This review can be carried out under one of the following procedures, at the taxpayer's choice:

(a) local review by the appropriate District Manager or Regional Assistant Secretary,

(b) by Revenue's Internal Reviewer alone, or

(c) jointly by Revenue's Internal Reviewer and an External Reviewer.

Further details are set out in Statement of Practice – Revenue Internal Review Procedures (SP-GEN/2/99 (Revised January 2005)).

Inheritance law has its basis in the Succession Act 1965, and tax law concerning inheritance, as contained in the Capital Acquisitions Tax Consolidated Act 2003, follows these general law principles as regards determining the status of relationships. Therefore, the relationship between a couple who are not married, although living together as man and wife, is not recognised for the purposes of the higher exemption thresholds that might be granted to married persons when calculating inheritance tax.

Finally, with regard to other Revenue matters concerning cohabiting couples, sections 1017 to 1019, inclusive, of the Taxes Consolidation Act 1997 deal with the joint assessment of married couples for a tax year. Persons assessed to tax under these provisions are entitled to married person's tax treatment. Before the tax year 2011, these provisions only applied to married couples. For the tax year 2011 and future tax years joint assessment treatment will be extended to civil partners (within the meaning of the Civil Partnership and Certain Rights and Obligations of Cohabitants Act 2010). The legislation to provide for this extension is currently being prepared.

All other persons are assessed for tax as single persons in accordance with section 1016 of the Taxes Consolidation Act 1997.