Tax exemption
Deeds and transfers made in connection with separation or divorce proceedings are exempt from taxes, under the specific legislation.
CAF services · Family
Separation and divorce: the tax effects
Separation and divorce in Italy have tax consequences that often nobody explains, and they follow from the decisions taken before the judge: maintenance for a spouse is deductible, maintenance for children is not; the family home awarded to one partner changes who pays IMU (the Italian municipal property tax); the deductions for children are split according to precise rules.
01 · The distinction
Maintenance for a spouse and maintenance for children
This is the distinction the whole tax treatment depends on, and it must be reflected in the judge's order or in the court-approved agreement.
| Maintenance for the spouse | Maintenance for the children | |
|---|---|---|
| For the payer | Deductible from total income | Not deductible |
| For the recipient | Taxable income, to be declared | Not taxable, not declared |
| Condition | Paid periodically under an order of the judicial authority | No tax effect |
| One-off lump sum | Neither deductible nor taxable | Not relevant |
| Arrears | Deductible in the year of payment | No effect |
If the order sets a single undivided payment for spouse and children, the law presumes that half is intended for each: only fifty per cent is deductible. Stating the two components separately, where this reflects reality, avoids losing deductibility.
02 · Deductions
Deductions and dependants after separation
Both parents keep the status of having a dependent child: what is shared out are the deductions and the right to claim expenses.
- Without an agreement, the deduction for children goes to the parent with custody.
- With joint custody it is split fifty-fifty, unless agreed otherwise.
- The parents can agree to give it in full to the one with the higher income.
- The expenses paid for the child are deducted by whoever actually paid them.
- The assegno unico (the universal child allowance) follows its own rules, with a split between the parents.
- The percentage declared must match between the two parents: data cross-checks bring any duplication to light.
Practical advice
Agree before the tax return.
- Decide who claims the medical, sports and school expenses
- Keep receipts in the name of the person who really pays
- Align the percentages declared by both of you
- Redo the agreement each year, if circumstances change
03 · The family home
The family home awarded to one spouse
Awarding the family home has effects on IMU, TARI (the municipal waste tax) and the income tax return, which do not always follow ownership.
- For IMU purposes, awarding the family home creates a right of residence: the person liable is the spouse who is awarded the home.
- This applies even if the property belongs to the other spouse or is jointly owned.
- TARI is due from whoever occupies the property.
- The property income stays with the owner, but the home awarded to the other spouse is no longer the owner's main residence.
- The deduction for mortgage interest is not lost if the property is occupied by the separated spouse or by the children. See mortgage interest.
- The award must be registered to be enforceable against third parties.
The spouse who is not awarded the home loses the IMU main-residence relief on that property, but keeps it on the one they move to, if they take up residence there. This needs sorting out with the Comune (the town council) straight away, otherwise IMU ends up paid in the wrong amount by both parties.
04 · The household
How the ISEE changes
Separation changes the make-up of the household, with effects on every benefit linked to the ISEE (the Italian indicator of household financial circumstances).
Splitting the household
Separated or divorced spouses with different residences form separate households.
The children
They belong to the household of the parent they are registered as living with.
The parent living elsewhere
In some cases they must still be taken into account: this is the additional component of the ISEE for benefits for minors.
The exceptions
The parent living elsewhere is not taken into account in specific cases, such as when they are married to someone else or have children with someone else.
The ISEE for benefits for minors is the one needed for nursery school, school meals, bonuses and university: the parent living elsewhere is included unless one of the exceptions applies. That is why, after a separation, the ISEE can come out higher than the real situation of the household would suggest.
05 · Assets and property
Transfers between spouses
Separation and divorce agreements often provide for transfers of property or sums of money: these receive favourable treatment.
The condition
The transfer must serve to settle the relationship between the spouses within the proceedings.
Property
Transferring a share of the family home to the other spouse typically falls within the exemption.
Capital gain
Your position regarding capital gains needs checking, under the applicable rules.
In favour of the children
Transfers to the children provided for in the agreement can also benefit from the exemption.
Putting it on paper
The link with the proceedings must be shown in the deed: it is the condition for the relief.
06 · The checklist
What to sort out after separation or divorce
These are steps nobody remembers at the time, and they come back later as problems.
- Registered residence: updating it is the basis for almost everything else.
- IMU: notify the Comune of the award and the new situation, for both properties.
- TARI: notice of ending occupation for whoever leaves, of starting occupation for whoever arrives.
- Deductions with your employer: update the declaration of family dependants.
- ISEE: redo the DSU (the self-declaration the ISEE is based on) with the new make-up of the household.
- Assegno unico: update the application with the agreed split.
- Utilities and contracts: transfer the electricity, gas and lease into the right name.
The most neglected item is updating the deductions with your employer: if you keep declaring your spouse as a dependant after separation, you face a substantial year-end adjustment to pay, a year late and at the worst possible moment.
Frequently asked
The questions that keep coming up
Is the maintenance I pay my wife deductible?
The part intended for the spouse is, if paid periodically under an order of the judicial authority. The part intended for the maintenance of the children is not deductible.
If the order states a single undivided amount, the law presumes that half is intended for each: only fifty per cent is deductible. It is better for the agreement to distinguish the two components.
Who pays IMU on the home awarded to one spouse?
The spouse who is awarded the home, because for IMU purposes awarding the family home creates a right of residence: that spouse is the person liable, even if the property belongs to the other.
The spouse who owns the home but was not awarded it does not pay IMU on that property, and keeps the main-residence relief on the one they move to, if they transfer their residence there.
Who deducts the children's expenses?
Whoever actually paid them. The deduction for dependants is split according to custody and the agreements, but expenses (medical, sports, school) are deducted by whoever paid.
Keeping receipts in the name of the person paying and agreeing in advance who claims what avoids duplication, which data cross-checks reliably bring to light.
Do I have to declare the maintenance I receive?
The part intended for you as spouse, yes: it is income treated like employment income and must be entered in your tax return.
The part intended for the maintenance of the children is not taxable and is not declared. If the order does not distinguish, the fifty per cent presumption applies.
Let's talk
The way the agreement is worded decides the tax treatment
A single undivided payment for spouse and children loses deductibility on the part that would have had it. It is worth checking before you sign.