Last month saw the third Finance Bill of the year published. This new 80 page long addition to the tax law canon provides for an equalisation, if not a synchronisation, of the treatment of civil partners with married couples. There are also provisions to offer tax relief on some transactions between co-habiting couples. The Bill contains some significant anti-avoidance provisions, mainly concerning the timing and use of elections to a form of joint assessment by civil partners.

When passed into law, the Bill will add two new Parts to the Taxes Consolidation Act 1997. A new Part 44A deals with Civil Partnerships, and prescribes the rules whereby Civil Partners may elect to be jointly assessed. It also addresses situations where the partnership is dissolved, the tax treatment of maintenance payments, and makes provision for CGT relief on asset transfers between civil partners.

A new Part 44B makes more limited provisions for the treatment of co-habiting couples, largely addressing maintenance payments and CGT issues.

However, the bulk of the legislation makes provision for the technical amendments that have to apply to give full effect to the general thrust of the tax changes for civil partners and cohabitants, not just within the Taxes Consolidation Act 1997 but across the other taxing statutes also.

Announcing its publication, Finance Minister Michael Noonan said:

“This Bill was published separately from Finance (No. 2) Act 2011 as it implements changes that go right through the tax system and will require detailed consideration.”

The full text of the Bill and the Explanatory Memorandum are to be found at http://www.finance.gov.ie/viewdoc.asp?DocID=6882