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Calculating child maintenance
Child maintenance payments tax for the receiving parent
Child maintenance payments tax for the paying parent
PacisLexis Family Law
Are child maintenance payments taxable?
To learn more about child maintenance payments tax in France, we invite you to read this article.
Children maintenance rules for a set of payment made from one parent to another to help pay for your child’s living costs. It’s paid by the parent who doesn’t usually live with the child to the person who has most day-to-day care of the child and called ’child support’.
This payment is not only based on day-to-day care of the child but also on both parents’ incomes.
In France, paying child maintenance does not stop even if your child is over 18. The parent who must pay for child maintenance, will have to pay it until the child can afford to pay his own bills and living cost.
In France, despite your child is over 18 you will have to pay for child maintenance. Paying for child maintenance will stop only when your child is capable to pay for all the bills, living costs and rents on his own.
Paying for child maintenance will not stop in case of disability or guardianship order as well.
Child maintenance includes most of day-to-day care of the child such as:
- Clothes,
- Housing,
- Scholarship fees,
- Food,
- School bills.
Other expenses will be qualified as exceptional and won’t be included into the child maintenance calculation.
The paying parent is the one paying for child maintenance and the receiving parent is the one receiving child maintenance.
It’s possible in France to pay child maintenance directly to the child or children.
Child maintenance payment taxes system is quite complicated in France. Here is an example to help.
Marthe and Max have been legally divorced since 2020. They have 2 minor children, Louis and Emma.
The court has decided that the children will live with Marthe. Max is making monthly payments for child maintenance.
In 2022, Max and Marthe file separately their income tax returns for 2021.
Under the principle of “Quotient Familial” – in France, family taxation is based on a “quota”, or number of adults and children within the household. The tax burden is reduced for families with children. In comparison, the UK taxation system is the other way round. The UK’s taxation system is based on an assessment of individual income.
In France, household incomes are, in effect, pooled and then divided between household members before calculating tax due. It considers the entire composition of the household to determine the number of dependants, and thus the total amount of tax payable. It means that each adult is the equivalent of one unit or ‘share’.
The first two child dependants are counted as half a unit each, whilst the third (or subsequent) children are counted as 1 unit each. The total household income is then divided by the household ‘quota’ number which, for instance, in a four-person family with two adults and two children, as in our example, would be three.
Again, in France, when getting a divorce, spouses are taxed separately.
Going back to our example, Max, the paying parent, can claim tax relief depending on the amount of maintenance paid during the year, however he can only claim a ‘unit’ as he’s considered as an ‘individual or single’ again.
Marthe is the receiving parent and child maintenance is taxable. As the 2 children are living with her, it represents 2,5 units.
child maintenance payments tax
Calculating child maintenance payments
What to do when both parents agree on child maintenance’s amount?
Several situations to consider:
- With a mutual consent divorce: the child maintenance amount can be included within the divorce petition.
- With a contested divorce: the court can agree on the child’s maintenance amount if it’s fair for the child.
- With a separation (civil partnership or cohabitation): if both parents don’t agree they can write a deed to formalise their agreement. The court can make the deed legally binding and serves an order.
What to do when both parents don’t agree on child maintenance’s amount?
The court can get involved if both parents don’t agree on the child maintenance’s amount and the T&Cs.
The court will take into account both parents’ incomes and expenses as well as the children’s needs and welfare to determine the amount.
In divorce proceedings, the child maintenance is fixed twice by the courts:
- Within the interim measures. If a spouse is not happy with the T&Cs fixed in the divorce petition, he/she can appeal.
- Within the divorce order. If a spouse is not happy with the T&Cs, he/she can appeal.
child maintenance payments tax
Child maintenance payments tax for the receiving parent
Are maintenance payments considered as taxable income?
Yes!
After you’re officially divorced, you have to file your tax return individually and indicating the child maintenance amount as it’s taxable income.
Is the child maintenance amount taxable for the receiving parent?
Yes!
The child maintenance amount received is taxable.
What is worth maintenance payments tax?
Maintenance payments tax is worth 10% of the maintenance you receive from your ex-spouse.
In the UK, it’s again the other way round. If you receive maintenance payments, they are not counted as taxable income. HMRC doesn’t treat spousal support or maintenance as taxable income.
Is there a tax relief on maintenance payments for the paying parent?
Yes!
The relief can be less than €400 per child and can not be more that €3,912 per household.
In other words, the paying parent can get a tax relief up to a maximum amount and depending on the number of the children.
In France, how to file child maintenance on tax return?
You can file child maintenance payments through internet or paper….
child maintenance payments tax
Child maintenance payments tax for the receiving parent:… Next
My child is over 18, shall I still have to pay for child maintenance?
Yes!
The child maintenance tax will remain in place if the child is still living with the receiving parent.
Does the receiving parent get a tax relief too?
Yes!
The amount of tax is calculated based on the tax bracket that the divided sum falls into, and total is multiplied by the household quota. The result is a lower overall tax bill for the household that is primarily driven and determined by the number of dependants – not just the number of earners and split of earnings between them.
With a joint custody, it’s exactly the same.
For example: a child is considered as half of a unit and both parents get one quarter of a unit each.
In our example, Marthe gill get 1.5 units.
child maintenance payments tax
Declaring child maintenance on tax return for the paying parent
Shall the paying parent declare child maintenance payments on tax return?
Yes!
The paying parent will have to declare child maintenance payments on tax return.
Can the paying parent get a tax relief on child maintenance payments?
It depends!
In many cases, the paying parent can get a tax relied on child maintenance payments. However, with a joint custody, there is no tax relief for child maintenance payments as both parents get a ‘unit’ each.
Can the paying parent get a unit?
It depends.
If the children are living with the receiving parent, the paying parent cannot get any unit.
With a joint custody, the paying parent can get a unit.
For example: with only a child, parents are considered as one quarter of a unit and the child as half of a unit.
In our example, Max will get 1.5 units
Are child maintenance payments taxed in the UK?
If you’re the paying parent, you can get a tax relief. Maintenance payments relief reduces your income tax if you make maintenance payments to an ex-spouse.
Maintenance payments relief is worth 10% of the maintenance you pay.
However on the other hand, the receiving parent may have to pay tax on child maintenance payments depending on their private circumstances and also depending on if they made a private arrangement or throughout the CMS.
If you get benefits such as universal credit for example, child maintenance payments will not affect your benefits and won’t be taxed.
The UK system is seen as unfair at some point. As seen above, the UK’s taxation system is based on an assessment of individual income and are not in favour of families and children.
You should seek advice from a qualified professional such as family law lawyers to understand how child maintenance payments may impact your benefits.
To help you
and to care
PacisLexis Family Law
You want to learn more about Child maintenance payments tax?
Our Pacislexis Family Law Firm offers you an evaluation of the amount of child maintenance you could be entitled to receive or pay.
For this purpose, we use artificial intelligence, which takes into account multiple factors such as parents’ incomes, their expenses, and the child custody arrangements.
The report generated by this artificial intelligence can be submitted to the judge, which will give weight to your claim.
PacisLexis Family Law
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International tax lawyers
For a complete guide about taxation in France, we invite you to read this article and to book an appointment with one of our international tax lawyers.
In France, household incomes are, in effect, pooled and then divided between household members before calculating tax due. It considers the entire composition of the household to determine the number of dependants, and thus the total amount of tax payable. It means that each adult is the equivalent of one unit or ‘share’.
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