PERSONAL ALLOWANCES & DEDUCTIONS
The following are basic allowances and deductions that can be claimed.
A resident individual is entitled to a personal allowance as follows:
- $10,000 for Income Years 1990 - 2000
- $12,000 for Income Year 2001
- $14,000 for Income Year 2002
- $16,000 from Income Year 2003
- $17,000 from Income Year 2009
- $18,000 from Income Year 2013
An allowance of $1,500 is granted to a resident individual in respect of his/her spouse, if during the income year the spouse was maintained by him/her.
To qualify for this deduction you must be legally married and your spouse’s income for the year must not exceed $3,000. Where the spouse has assessable income between $1,500 and $3,000, the allowance will be reduced by one dollar for each dollar in excess of $1,500.
CHILD ALLOWANCE (SECTIONS 48, 49, 50)
- This allowance can be broken down into four categories:Child born during the Income Year or who has not attained the age of ten (10) years, the claim shall be $1000;
- Child who has attained the age of ten years and above and who was a student child during the Income Year, the claim shall be $2000;
- Child or Relative, where claimant is acting as a parent, who irrespective of age was a University student, whether in St. Lucia or elsewhere, during the Income Year, the claim shall be $5000 (taxpayer to provide proof of attendance, i.e., letter from school attended, receipt/proof of fees paid directly to school, transcripts etc.);
- An invalid or incapacitated child, irrespective of age, can also be claimed under Section 49 for $1000.
The taxpayer can claim for a biological child, a stepchild or a legally adopted child.
DEPENDENT RELATIVE (SECTION 52)
- A resident individual who has maintained a dependent relative during the Income Year is entitled to a deduction of $350;
- The meaning of dependent relative as stipulated in the Income Tax Act stands. If the taxpayer claims for the child under sections 49 or 53, the respective claim should be allowed. This is in keeping with Subsection 43(2) of the Income Tax Act.
HOUSEKEEPER ALLOWANCE (SECTION 51)
- The deduction under this section is $200;
- This claim can be made by a resident individual being a widower, widow, unmarried, divorced or separated who maintains a relative during the income year for the purposes of caring for children ten (10) years and below or in the capacity of housekeeper;
- The relative had to be residing with the taxpayer during the Income Year;
- The deduction shall be granted in respect of one individual for any year of income;
- No claim is granted for that same relative under section 53.
MEDICALS (SECTION 56)
- Medical expenses can be claimed on behalf of self, dependent spouse and or relative and housekeeper;
- Automatic claim of $400 without bills. If taxpayer produces bills in excess of $400, only the value of bills will be allowed. For claims below $400, the automatic claim of $400 will be granted;
- Should medicals exceed $400, please inform taxpayer to hold the bills, which should later be submitted upon request for review by the Department;
- Only medical claims from registered practitioners will be acknowledged;
- There is no limitation on medical expenses;
- If the taxpayer has a Medical Insurance (statement to be attached), total medical expense is:
a) The premiums paid plus
b) Claims not reimbursed plus
c) Receipts on hand.
- Foreign Medical Insurance premiums to be allowed in full;
- If expense was incurred in a foreign currency, an average of the exchange rates for the year should be used. This can be obtained from the gazettes.
INDIVIDUAL REGISTERED RETIREMENT SAVINGS PLAN (12 OF 1999)
- Maximum deduction allowed is $8000;
- Plan must be approved by the Comptroller;
- Plans from the following corporations have been approved:
a) Life of Barbados;
c) British American;
d) Financial Investment & Consultancy Services Limited;
e) First Citizens Investment Services;
NIC CONTRIBUTIONS AND LIFE INSURANCE (SECTION 53)
- NIC contributions and Life Insurance claims can be made by a resident individual in respect of payments made on behalf of self, spouse, children or other dependents;
- NIC contributions paid should be 5% of gross emoluments, but not exceeding current ceiling of $3000. If taxpayer pays in excess of 5%, but does not exceed the ceiling of $3000, then the actual amount paid should be allowed;
- NIC and Life Insurance claims together should not exceed the lower of 10% of the assessable income of the taxpayer or $8000;
- Foreign insurance policies should be restricted to 50% of total premiums paid;
- The 50% restriction should be limited to the higher of 1/20 of the Assessable Income or $3000;
- Approved Pension Fund Contributions and contributions from other funds do not form part of the 10% restriction.
REGISTERED HOME OWNERSHIP SAVINGS PLAN (12 OF 1999) (SEC 74)
- To qualify under this plan, the resident individual must not have previously owned a home in St. Lucia;
- Deduction allowed is up to a maximum of $6000;
- Some of the institutions which offer the Registered Home Ownership Savings plans are:
a) Bank of St. Lucia;
b) Bank of Nova Scotia;
c) Financial Investment & Consultancy Services Limited;
d) FirstCaribbean Intl. Bank
e) First Citizens Investment Services
Please note that amounts withdrawn within 5yrs shall be included as income in the year of withdrawal.
MORTGAGE INTEREST (SECTION 54 (A))
- Mortgage Interest can be claimed by a resident individual;
- Maximum allowed under this section is $18,000;
- Claim can be apportioned between two or more persons, provided that the total amount claimed does not exceed the limit of $15000;
- Interest paid on loans taken for home improvements will be granted as Mortgage Interest and as a result will form part of the $15000 limitation;
- The claim for Mortgage Interest can only be granted if taxpayer does not have Property Tax arrears;
- Claim can only be made in respect of one owner occupied dwelling house.
HOUSE INSURANCE (SECTION 54 (C))
- House Insurance payments can be claimed by a resident individual;
- The premiums must relate to the Income Year under review;
- Premiums must be paid (Proof of payment to be attached eg. Insurance statement/receipt);
- Premiums can be apportioned between claiming parties;
- There is no limitation on the amount to be claimed.
HOUSE TAX (SECTION 54 (B))
- House Tax payments can be claimed by a resident individual;
- The claim is allowed in respect of House Tax paid in the Income Year irrespective of the year it relates to;
- Receipt must be attached;
- There is no limitation on allowable amount.
REPAIRS AND MAINTENANCE (SECTION 54 (D))
- A description of repair work done during the Income Year must be presented separately;
- Bills should be kept by taxpayer and presented upon request for review by the Department;
- Interest paid on monies borrowed to carry out repair work is not an allowable deduction.
- Please note that the value of bills for home improvement will not be allowed as a deduction
DONATIONS AND GIFTS FOR APPROVED PURPOSES (SECTION 55)
- Must be made:
a) under a Deed of Covenant for a period of not less than three years to any religious, charitable, medical or educational institution or sporting body or fund of a public character, approved by Cabinet;
b) to the St. Lucia National Trust;
c) to the Loan Fund established under the Special Education Act of 1969.
- The deduction shall not exceed 25% of the assessable income.
DEDUCTION FROM SHARES IN COOPERATIVES (SECTION 57)
- Deduction can only be allowed to resident individuals;
- Maximum deduction allowed is $5000;
- Amounts withdrawn should be deducted from the total contributed for the Income Year.
STUDENT LOAN INTEREST (NO 12 OF 1999) SECTION 58
- Maximum deduction allowed is $3000;
- The interest can only be claimed by the student.
ALIMONY AND MAINTENANCE (SECTION 47)
- Must be pursuant to a Court Order;
- Proof of payment to be provided;
- Allowable in full, however, the recipient must be chargeable to tax under the Income Tax Act.
Chargeability to Tax is determined by ascertaining the recipient’s residency.
SOLAR WATER HEATER (NO. 7 OF 2006)
From Income Year 2005 up to and including Income Year 2007, a deduction of up to $6,500 shall be allowed to a resident individual for the purchase and installation of a new solar water heating system.
A receipt must be attached to the return form.
SHARES IN PUBLIC COMPANIES (NO. 9 OF 2001) SECTION 59
- Claim can only be made by a resident individual;
- Maximum allowable deduction is $5000;
- The purchase must be made on new shares, i.e. the company must have issued new shares;
- The company must be a resident public company.
- The policy has been to allow the Membership fees paid to professional organizations (Section 39(n));
- Fees paid to any person for the preparation of their Income Tax Returns (Section 39(m);
- Traveling and Entertainment paid by Employer should be included in gross Income, with a breakdown of total allowances paid. Taxpayer is not automatically entitled to the deduction; however, his claim will be considered if supported by a letter from employer describing the nature of the job, and details of the traveling or entertainment.
To learn how these allowances and deductions are used to fill-out of one's income tax return, read Allowances & Deductions for Return Forms