Divorce and Tax

Divorce and tax
Divorce and taxation is a difficult matter for many individuals, while there are so many opportunities. It goes without saying that you do not file an incorrect tax return, apply prohibited tax constructions or keep a sloppy administration. When you delve into tax matters, or receive expert tax advice on tax regulations and laws, there are important benefits to be gained and you are protected against sanctions, fines, legal proceedings and the like.

Private individuals sometimes need specialist knowledge, for example for calculating taxes, clarity in the tax consequences of pension, inheritance or divorce, making real estate financially transparent, and the like. AGA Fiscalisten has the expertise and experience to fully clarify complex financial issues. Our reliable expert tax specialists, who all have years of experience, see every opportunity. All our tax specialists have years of experience and the mr. title.

Divorce and the tax authorities.
A divorce can be very complex for tax purposes. Almost every year, for this reason, the tax authorities have an advertising campaign about tax returns after a divorce. This is because after a divorce, many tax mistakes are often made when filing the tax return. Make sure you file a correct tax return, to avoid hefty additional taxes and any financial problems. Research shows that married couples make more than 2.5 times as many mistakes in a tax return than married couples, as well as that newly divorced couples receive 8% more injunctions. AGA Fiscalisten always ensures a correct tax return. The reason for this is that usually a lawyer or mediator accompanies a divorce. It is precisely with a lawyer or mediator that the tax knowledge is lacking, which often leads to errors.

Do you file your income tax return separately or together after a divorce?
If both partners are registered at one address, this is a tax partnership. Once both partners are registered at a separate address after a divorce, there is no longer a tax partnership. When filing a petition to the court to end a marriage or registered partnership, a tax partnership is broken. In that particular year, the partners still have the choice whether to remain each other's tax partners or not. Tax partners sometimes have advantages, but then the tax return must be made jointly.  

Tax and owning a home when divorcing.
In a tax return after a divorce, the home and mortgage is regularly a difficult subject. If you are still tax partners that year or one of the partners has left the house, then some questions will be addressed. In any case, the value of the property must be divided between the partners.  There may be undervalue or surplus value regarding the house. If this is not settled with each other, the tax authorities usually see this as a donation, for which gift tax must be paid in certain cases.

The moment you get divorced, you can decide to sell the house together. After it is sold, there may be surplus value or a residual debt. You will have to divide this debt or surplus value together according to ratio the percentage of ownership is divided. If you are married in community of property, you are always 50% owner.

If you sell the old home and have realized an excess value, you must use this surplus value if you buy a home again within 3 years. If you do not do this, the interest on the mortgage of the additional amount is no longer deductible from the tax. This is called the loan scheme.

If you sold your home between October 2012 and January 2018 and had a residual debt, you have the right to declare the interest on this debt as a deduction to the tax authorities for 15 years.

Another solution of divorcing couples is for one party to buy out the other. Then one party continues to live in the house and the other leaves. It is then important to determine what the house is worth by having an appraisal report drawn up. If there is excess value, the departing party will have to take into account the loan scheme as mentioned above.

For the party who continues to live in the house, it is important to declare the full share of the house to the tax authorities when filing the return. The owner-occupied home is calculated on this entire share. In addition, you can now declare the interest on the entire debt as a deduction to the tax authorities.

Sometimes there is a loan scheme and for the interest deduction, the two-year period concerns the separation rule should not be forgotten.

Tax: distribution of savings and household effects after a divorce
Savings and household effects are divided between the partners. It sometimes happens that gift tax has to be paid if there is an under- or over-distribution. This means that one partner receives more of the contents and savings than the other partner. If that is above a certain amount, gift tax must be paid.

Tax and pension in the event of a divorce
It sometimes happens that one partner cannot finance the surplus value of the home in order to buy out the other partner. In such a case, for example, other agreements are made about the pension distribution. The right to the pension to be equalised is sometimes exchanged for the buy-out of the other partner regarding the surplus value of the home. The tax authorities do not accept this in certain cases.

Allowances and divorce.
Often, with a divorce, things also change around being entitled to certain allowances. This includes the child-related budget, care allowance, housing allowance and childcare allowances. If you and your partner decide to separate and no longer be tax partners, both will change their assessment income. This is important to calculate whether you would be entitled to certain allowances granted by the government. In addition, it may be that one of them moves and moves into a social rental home; Then the person is entitled to rent allowance.

If children are involved in the divorce, a lot can change for them. The living situation will be different and childcare will probably be required. A lot may also change for the granting of various allowances. It is therefore important to inform yourself well about this matter and what you are entitled to.

Tax and alimony.
You never have to declare child support to the tax authorities. Both the one who receives this and the one who has to pay it. Spousal maintenance, on the other hand, is a different story.

If you pay spousal maintenance to your ex-partner, you can specify this in your tax return. This is then a deduction that lowers your annual income. This affects the tax you pay and the surcharges you may be entitled to. The person who receives spousal maintenance must also give this up. As a result, the annual income for, among other things, the allowances will be higher, so that, for example, the amount that one receives in allowances will be lower.

Questions from individuals about divorce
The following questions that we regularly receive from private individuals:

• What are the tax consequences of a divorce?
• What is the wisest choice to buy off a partner's alimony in one go?
• What are the tax consequences if I pay the mortgage or rent after the divorce?
• How much mortgage interest deduction should be deducted for the ownership part?
• What deductions are there in the event of a divorce?
• How does divorce affect my tax credit?
• How can I avoid divorce tax mistakes?

Our tax specialists are asked many other tax questions and issues than the above. You can also submit all these questions to us. We provide clarity and solve your tax issue or question.

Why tax advice on divorce from AGA Fiscalisten?
AGA Fiscalisten stands for high-quality expert tax advice. All our tax specialists are senior tax specialists, have years of tax experience, and have graduated from the university in tax law and hold the title "mr.".

A (senior) tax specialist specializes in tax law while a tax advisor has only completed tax courses. A tax advisor has much less knowledge than a tax specialist and often makes mistakes with potentially significant financial consequences. It is wise not to settle for a non-qualified tax advisor, but to engage an expert senior tax specialist. This way you avoid problems, fines or procedures and you do not miss out on tax benefits due to advice that is not sufficiently expert.

High quality tax specialist; Master title mr. and years of experience
All our tax specialists have years of tax experience and the "mr." title. The most recent developments and changes concern taxation and all relevant legislation is studied and discussed by our tax specialists. This gives us the opportunity to clarify all the problems and issues about taxation. We achieve the best possible result for our customers. Tax advice, tax returns, financial advice, legal advice or discussion partner, AGA Fiscalisten will arrange it for you!

Contact AGA Fiscalisten
The tax specialists of AGA Fiscalisten can do a lot for you, from an answer or advice to your tax questions to guidance throughout the entire process. If you have any questions or issues and would like high-quality tax advice, please contact one of our expert experienced tax specialists for an intake interview free of charge and without obligation.

NEED TAX ADVICE? Call: 040-8489888 1st free and non-binding intake interview. Available by phone: Monday to Friday between 09.00h and 20.00h) We can also be reached by e-mail: info@agafiscalisten.nl or via the contact form on the right side of our website.

MORE INFORMATION
At the top of this website in the menu bar, you will find more information about tax advice. To do this, click on the menu bar at the top of the website.

AGA Fiscalisten specialisations
AGA Fiscalisten is at your service regarding:

• Financial advice;
• Tax advice;
• Wealth accumulation;
• Liability;
• Income security;
• The total insurance package;
• Pension accrual;
• Legal advice (tax lawyers, employment lawyers, corporate lawyers);
• Taxes: gift tax, inheritance tax, income tax, transfer tax and other taxes;
• Prepare tax returns and review tax assessments and orders;
• Tax law: legal proceedings, legal documents, due diligence assistance, etc.;
• Tax profit calculation, assets, lease car, real estate;
• Legal forms: B.V., VOF, partnership, N.V. limited partnership, association, foundation, holding structure etc;
• Tax inheritance law, death, divorce, advice regarding retirement provisions; and
• And so much more...