Deed of covenant – Tax Relief
A Deed of Covenant is a legally binding written agreement to pay an agreed amount to another person. You must not receive any benefit in return for paying this amount.
Covenants to certain individuals qualify for tax relief. You can claim relief on covenants to:
- One or more adults aged 65 or over. The relief you receive is restricted to 5% of your total income.
- Permanently incapacitated minors. A minor is a person under 18 years of age who is not married or in a civil partnership. You cannot claim tax relief on covenant payments you make to your own incapacitated child.
- Permanently incapacitated adults.
A Deed of Covenant must last for more than six years to qualify for tax relief.
A deed of covenant works best if the person paying is a 40% taxpayer to a the person who receives is a exempt from tax or pays tax at 20%
Subject to qualifying conditions
Any queries give me a call on 091 763817 or email me at email@example.com