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In the year of a divorce or the dissolution of a civil partnership (PACS), each former partner must file their own income tax return. Should they file a joint or separate tax return? Do they remain jointly liable for tax debts? Must they declare child support payments? And what about spousal support or compensatory payments?
Marriage, Civil Partnerships (PACS) and Income Tax Returns
Under the household taxation principle, married couples (regardless of their matrimonial property regime) and partners in a French civil partnership (PACS) (French General Tax Code, Article 7) are subject to joint taxation (French General Tax Code, Article 6(1).
By way of exception (other than where a divorce has been granted or a PACS has been formally dissolved), married couples and partners in a French civil partnership (PACS) may be subject to separate taxation only in the limited circumstances expressly provided for by law, namely where:
- The spouses or civil partners are subject to a separation of property regime and do not live together in the same household;
- The spouses or civil partners undergo divorce or legal separation proceedings and have been authorized to reside separately;
- One of the spouses or civil partners has left the matrimonial home, and each has separate income.
Divorce or Dissolution of a Civil Partnership (PACS): Income Tax Filing Rules
Where a divorce or the dissolution of a French civil partnership (PACS) has taken effect (as opposed to a mere de facto separation), Article 6(6) of the French General Tax Code (CGI) provides that, for the year in which the separation takes effect, two separate tax assessments must be issued.
In practical terms, each former spouse or former civil partner files their own income tax return, including:
- their personal income for the entire tax year;
- their share of any income that was jointly earned, allocated on a pro rata basis according to the portion attributable to them.
Good to note: This does not mean that a joint tax return must be filed for the part of the year during which the couple was still married or in a PACS, followed by separate tax returns after the divorce or dissolution. Rather, each former spouse or civil partner must file a separate tax return for the entire tax year; there is no "switch" from joint to separate filing during the year.
Divorce, Dissolution of a Civil Partnership (PACS), and Joint Tax Liability
Principle of Joint Tax Liability
Where spouses or partners in a French civil partnership (PACS) are subject to joint taxation, they are jointly and severally liable for the payment of income tax (French General Tax Code (CGI), Article 1691 bis).
Conversely, a spouse who is subject to separate taxation pursuant to Article 6(4) of the French General Tax Code is not jointly and severally liable for the income tax payable on their spouse's income.
Joint Tax Liability Following Separation
In the year of the divorce, once each former spouse files a separate income tax return, neither former spouse remains jointly and severally liable for the income tax due on the other's income (French General Tax Code (CGI), Article 1691 bis(I)).
Good to note: However, joint and several tax liability continues to apply in respect of tax periods during which the couple was subject to joint taxation, for as long as the tax due for those periods has not been paid in full.
Relief from Joint and Several Tax Liability
Divorced or separated individuals may apply for relief from joint and several tax liability where, on the date the application is made:
- The divorce judgment (or legal separation judgment) has been issued, or the agreement for divorce without judicial intervention has been filed in the records of a notary;
- The termination of the PACS (French civil solidarity pact) has been registered with the registry of the judicial court;
- The parties concerned have been authorised to maintain separate residences;
- Either spouse or partner bound by a PACS has left the marital home or the couple’s shared residence.
Relief is granted where there is a marked disproportion between the amount of the tax debt and the financial and net asset position, after liabilities, of the spouse applying for relief (French General Tax Code (CGI), Art. 1691 bis, II).
Discretionary tax remission procedure (new): Law No. 2024-494 of 31 May 2024, aimed at ensuring greater fairness in the division of assets within families, introduced a new discretionary tax remission procedure (French Tax Procedures Code, Art. L. 247, para. 7).
An ex-spouse may now apply to the tax authorities to be treated as a third party to the debt by demonstrating that they was not involved in the fraud that gave rise to the tax debt and, consequently, may be released from liability for that debt.
Divorce and the taxation of child support (CGI, Art. 156, II, 2°)
Minor child
Child primarily residing with one parent
In the event of divorce, minor children are, in principle, included in the tax household of the parent with whom they primarily reside. That parent:
- benefits from an increase in the family quotient (number of tax shares), which varies according to their circumstances and the number of children; and
- declares any child support received as income.
Correspondingly, the other parent may deduct the child support paid towards the child’s maintenance and education (CGI, Art. 156, II, 2°).
Shared residence
Children are deemed to be dependent on both parents:
- The family quotient is shared between the parents;
- Any child support paid is not deductible, since the tax benefit arising from the family quotient is already shared between the parents.
Adult child
Tax benefits: inclusion in the tax household or deduction of child support
As with minor children, a parent cannot combine these tax benefits. Accordingly, a parent cannot deduct child support if they already benefit from an increased family quotient because the adult child is included in their tax household.
A choice must therefore be made between including the child in the tax household and deducting child support.
Child support paid for an adult child in financial need is deductible, subject to a limit set annually by law. Correspondingly, the amount of child support deducted must be declared by the child or by the parent whose tax household includes the child.
For the applicable child-support deduction limit, which is set annually, please consult the French public service website.
Deduction limit:
The deduction for child support paid to an adult child is capped (CGI, Art. 196 B). For example, in 2024, the limit was set at €9,794.
This limit is doubled where the taxpayer supports an adult child who is:
- in a PACS or married, where the taxpayer supports the couple; or
- single, widowed or divorced and has dependent children of their own, regardless of the number of children.
Lastly, where the maintenance obligation applies for only part of the year, the deduction limit is adjusted on a pro rata basis according to the number of months concerned, with any month commenced being counted in full.
Divorce and taxation of the compensatory allowance
(CGI, Art. 199 octodecies and CGI, Art. 156, II, 2°)
A compensatory allowance (prestation compensatoire) is a sum of money, property or annuity paid by one spouse to the other as part of a divorce meaning that the parties must have been married, in order to compensate for the financial disparity caused by the divorce.
It may result from an agreement between the spouses or from a court judgment. Where ordered by a court, it takes, in principle, the form of a lump-sum payment (a sum of money or transfer of property) and only exceptionally takes the form of an annuity. Where the spouses enter into an agreement, they are free to determine whether a compensatory allowance will be paid, as well as its form and terms.
Good to know: French law does not provide for a compensatory allowance following the termination of a PACS; it applies only in the event of divorce.
Compensatory allowances paid as a lump sum:
• Where the lump sum is paid in full within 12 months of the date on which the judgment becomes final:
the paying spouse is entitled to an income tax reduction equal to 25% of the amount paid, up to a maximum payment of €30,500 (CGI, Art. 199 octodecies);
• the recipient spouse is not subject to income tax on the lump sum received.
Where the lump sum is paid over a period exceeding 12 months:
• it is deductible from the paying spouse’s total taxable income; and
• it is subject to income tax in the hands of the recipient spouse.
Compensatory allowances paid as an annuity:
Whether the compensatory allowance is determined by a court or by an agreement between the spouses, the annuity is:
• deductible from the taxable income of the person making the payments; and
• correspondingly, taxable in the hands of the recipient as pension income, under the same rules as child support paid for a minor child.