Alimony claim? Fiscally bitter
Background: Legal costs and tax law – a difficult relationship
Whether it’s divorce, custody or alimony, those who argue about post-marital payments after separation often end up in court. But while the emotional burden is high, there is often also a financial burden: court and legal fees.
Many of those affected hope to at least be able to deduct these expenses from their taxes as an extraordinary burden. However, this is precisely what the Münster Fiscal Court has now rejected in a recent case.
The case: Maintenance proceedings despite own income
A woman sued for post-marital maintenance, although she herself had a regular income that was above the minimum subsistence level for tax purposes. She wanted to claim the costs of the legal dispute for tax purposes as an extraordinary burden.
However, the court made it clear:
Only those who lose their livelihood without the maintenance can offset such legal costs against tax.
This means that anyone who is financially secure even without the maintenance they are seeking must bear the costs themselves and cannot claim them against tax.
What generally applies to legal costs?
In principle, the following applies in tax law:
Legal costs are excluded from deduction unless there is a threat to economic existence without the legal dispute.
This applies to situations such as:
- Claim for necessary medical services
- Enforcement of living social benefits
- Fight for custody if your lifestyle depends on it
According to the court, this does not include a maintenance dispute with income above the subsistence level.
Another tax note on real splitting
Anyone who pays maintenance and would like to deduct it from tax as part of realsplitting must note:
The tax effect only takes effect with the consent of the recipient.
Only then are the payments taken into account as special expenses and assessed as taxable income for the recipient.
However, the court or legal costs incurred in preparing or enforcing this claim do not automatically count as income-related expenses.
Our tip:
- If you are planning a maintenance case, you should check (or have checked) in advance whether the expenses may have tax implications.
- If you pay alimony, real splitting may make sense – but only with the consent of your ex-partner.
- If you are unsure: It is better to seek tax advice once again – an individual assessment is particularly worthwhile when it comes to separation issues.
