This week I will talk about maintenance payment to a spouse and children. I’ll introduce you to a fictional character called Pat Choi. This blog is based on a recent Tax Appeals Case that Pat brought against Revenue. Let’s look at
- The Appeal
- Background
- Case for Pat
- Case for Revenue
- Outcome
- Lessons Learned
The Appeal
The appeal is against a decision by Revenue to remove tax credits that Pat got in the years 2021, 2022, 2023, and 2024. The amount of tax under appeal is €5,269. Pat though he was getting a tax refund of €9,662. But Revenue reduced his refund to €4,393. Here’s why.
Background
Pat married his childhood sweetheart Luvu Langtime in May 2002 in a lavish ceremony at Montfort Castle. Two daughters came along in 2004 and 2005. All was great for many years until he got the 7-year itch. In 2009, as they say, it all went Pete Tong. They blame each other for this seismic reversal. That was the year they separated. Pat moved into a rented property but retained his share of the family home he bought with Luvu.
For each of the years 2021 to 2025, Pat was in receipt of a tax credit for maintenance payments. The credit was for maintenance of €2,808. He was granted this tax credit for payment of his share of the mortgage on the family home of €234 per month. Pat had to make these mortgage payments from an order of a judge of the Circuit Court in 2019.
In September 2025, Pat submitted a claim for tax relief by backdating an AVC into the 2024 tax year. The AVC contribution was €24,156 and the tax relief he expected to get on that was €9,662.
Later that month got a letter with a Harp on it. That refund has been sorted, he thought, rubbing his hands in glee. Not so fast Pat. Revenue informed him that he had been selected for a verification check. This was in relation to the AVC and to the maintenance payments made in the years 2021 to 2024.
Verification check
In the verification check Revenue looked for the AVC certificate which Pat duly provided. He also gave them a copy of the circuit court order and he stated
“As you can see, I was ordered to pay a total of €634 split as follows: Maintenance for my daughter €200, maintenance for my daughter €200 and €234 payment towards the mortgage.
The payment for [daughter] was stopped after she finished her third level education (tax office was informed). The other two payments are continuing. Just under 2 years ago, your office informed me that the payment towards the mortgage did not qualify for tax relief and my tax cert was amended accordingly to pay back the allowance.”
On the 30th of September 2025 Revenue wrote to Pat to confirm
“I have removed the deduction for maintenance in the years 2021-2025 of €2,808 (€234×12).
The refund that you have received as a result of the claim to the AVC for 2024 has been offset against the liabilities generated in 2021-2024. Therefore, the final refund to you is €4,393.14.”
Tax liabilities
As a result of removing the tax credit for the maintenance payments it generated the liabilities for each year, as follows
| Year | Liability | Existing Liability | Total |
| 2024 | €1,236 | €0 | €1,236 |
| 2023 | €1,250 | €773 | €2,023 |
| 2022 | €1,179 | €0 | €1,179 |
| 2021 | €617 | €214 | €831 |
| Total | €4,282 | €987 | €5,269 |
On the 2nd of October 2025, Revenue issue P21 Balancing Statements for 2021, 2022, 2023, and 2024 confirming the above liabilities.
Pat appealed this to the Commission on the 20th of October 2025. The oral hearing of the appeal took place on the 31st of March 2026.
Case for Pat
In the case for Pat, he confirmed that he claimed relief for maintenance payment to his former spouse of €634 per month. This was for the years 2014 to 2020. In the final divorce hearing, the Court issued an order altering the allocation of these payments to
- €400 payable for the benefit of his two daughters and
- €234 payable directly to the mortgage company for the mortgage on the residence of his former spouse
Resulting from the reallocation he stated, “I was no longer entitled to claim tax relief in respect of the maintenance payments.”
In 2021 he notified the Tax Office of the new arrangements and provided them with a copy of the Court Order. He confirmed that
“The Tax Office, for reasons unknown to me, continued to grant tax relief on the €234 mortgage payment element of the revised maintenance arrangement, perhaps on the mistaken assumption that this payment was made directly for the benefit of my former spouse.”
Grounds for Appeal
He appealed Revenue’s decision on three grounds
- Administrative error. The Tax Office failed to remove the €2,808 maintenance despite Pat notifying them and giving them the Court Order
- Unauthorised Reclassification. The Tax Office applied tax relief on the mortgage payment, contrary to the Court Order and the tax regulations and
- Unlawful withholding of funds. Revenue held €5,269 of monies due to Pat as an offset against a relief that was an error from the Tax Office
At the oral hearing Pat accepted he wasn’t entitled to relief on the €234 per month payment to the mortgage company. His issue is Revenue entitled to recover tax for the years 2021 to 2024 where he made a full disclosure of his circumstances.
Case for Revenue
In the case for Revenue, they confirmed that Pat contacted them in January 2022 that his daughter was no longer a dependent. On the 11th of January 2022 Revenue advised Pat he was not entitled to tax relief on maintenance payments for dependent children. They also advised him that he would continue to receive relief for the payment of €234 per month.
Revenue submitted that the decision to grant and continue relief on the €234 per month was an error on their part. They also confirmed that given the relief was granted in error they offset the outstanding tax liability for the years 2021 to 2024 against the tax refund from the AVC payment.
They also confirmed that in recognition of the error made, they wouldn’t impose interest or penalties.
Outcome
Clare O’Driscoll is the Appeal Commissioner deciding on the outcome of the case. In her analysis she quoted the Menolly Homes case
“The burden of proof in this appeal process is, as in all taxation appeals, on the taxpayer. This is not a plenary civil hearing. It is an enquiry by the Appeal Commissioner as to whether the taxpayer has shown that the relevant tax is not payable.”
She confirmed that tax relief is allowed on maintenance payments to a separated spouse under a legally enforceable arrangement or court order. And she also confirmed that no relief was allowed for child maintenance payments or for mortgage payments for property which a taxpayer is the owner of.
The Commissioner confirmed the law that
“A Revenue assessment on a person other than a chargeable person may be made or amended by a Revenue officer at any time not later than 4 years after the end of the chargeable period to which the assessment relates.”
Revenue raised the P21 balancing statements for the years 2021 to 2024 on the 2nd of October 2025, which were within 4 years of the end of the tax years 2021 to 2024 inclusive.
As a result, the Commissioner found that Pat didn’t meet the burden of proof to establish that Revenue’s decision to remove the tax credit was incorrect. She also confirmed that Revenue was correct to collect the tax by offsetting the liabilities against the repayment to Pat. The law provides for this
Lessons Learned
One of the main lessons learned is if Revenue are giving you back money, they will check the repayment is right. If the repayment is small expect minimal checks. If the repayment is large expect checks at a more senior level. When they are checking you can assume they know as much about your finances as you do, if not more. Per the 2025 Revenue annual report, they carried out 237,550 audit and compliance interventions in 2025, yielding €734 million.
Pat wasn’t entitled to the relief in the first place, but it was still sore given Revenue made the mistake. He wasn’t trying to claim the tax credit. In fact, he had been more than honest in providing Revenue with all the information to disallow the credit.
There’s no tax relief for maintenance payments to children. But there is tax relief for payments to former spouses. Certain rules apply to get the tax relief
Regarding the former family home, it seems that Pat and Luvu owned this 50:50. And it also seems that his monthly €234 payment to the mortgage company was for his portion of the property. In my view, it’s possible to get maintenance tax relief for mortgage payments for a former family home. If Pat pays the full mortgage, then he should get a maintenance deduction for 50% of that, as it relates to Luvu’s portion.
As always, if you need help with your business or personal taxes, start here
