IRD Library Articles

ALLOWANCES & DEDUCTIONS

In our continued aim to ensure that our Tax Returns are user friendly, the Inland Revenue Department has provided instructions in the preparation of Personal Income Tax Returns. The following are basic allowances and deductions that can be claimed.

SECTION 4

Personal Allowance:

A resident individual is entitled to a personal allowance as follows:

$16,000 - from Income Year 2005

$17,000 - from Income Year 2009

$18,000 - from Income Year 2013

Enter amount on Line 120

Spouse Allowance:

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.

Enter amount on Line 121

SECTION 2 - SCHEDULE A

Dependants & Medical Expense Allowance

Children & Education Allowance:

‘Child’ includes a stepchild, a child born out of wedlock or a legally adopted child.

If during the Income Year you maintained a:

Child who is less than 10 years old:

Claim $1,000 per child

Child who has attained the age of 10 years old and was a student either in St. Lucia or elsewhere:

Claim $2,000 per child

Child with permanent disabilities irrespective of age:

Claim $1,000 per child

For a child/relative maintained during the income year who attended University or an equivalent educational institution the allowance is $5,000. Documentary evidence from the institution must be furnished.

Enter total on Line 8

Dependent Relative Allowance:

A resident individual is entitled to claim $350 in respect of each dependent relative that he maintains. ‘Dependant Relative’ is a person who (a) whether incapacitated or not is the parent or other lineal ancestor or aunt, uncle of that individual or his/her spouse and is unmarried, divorced, widowed or separated or (b) is incapacitated by old age or infirmity or unemployment by reason of old age and is the child, brother or sister of that individual or of his/her spouse.

Enter total on Line 9

Housekeeper Allowance:

An allowance of $200 is granted to a resident individual who is a widower/widow or is unmarried, divorced or separated, in respect of a relative maintained by him for the purpose of caring for his child(ren).

Enter total on Line 10

Medical Expenses:

Relief is granted in respect of medical expenses incurred by an individual during the income year on behalf of himself or on behalf of a dependent. Please note that only original receipts and bills will be considered. There is, however, an automatic allowance of $400 without any bills or insurance. If the taxpayer has a Medical Insurance Policy the total allowance is:

Premiums paid for the year; plus
Claims not reimbursed (Amount Paid less Amount Claimed); plus
Receipts on-hand

Enter total on Line 11

Note: Bills and receipts should be kept and presented only upon the request of the Comptroller. However, where an individual has Medical Insurance this statement must be attached to the Tax Return.

Enter totals from Lines 8, 9, 10, 11 on Line 12

Enter total Dependants & Medical Expense Allowances from Line 12 on Line 122 of the return form.

SECTION 2 - SCHEDULE B

Future Benefits:

Individual Registered Retirement Savings Plan/Approved Pension Fund

A deduction is allowable for contributions to Retirement Plans or Pension Schemes approved by the Department. Maximum amount allowable cannot exceed $8,000 in respect of each deduction

For Life Insurance & NIC you may claim the lesserof:
The actual premiums paid;
10 percent (10%)of the assessable Income; or
$8,000;
For Pension Funds established in St. Lucia - you may claim the entire amount of your contribution;
For Funds not established in St. Lucia and participation commenced before 1988, 50%of the contribution is allowable.

Complete the relevant table. Add Lines a, b & c and enter total on Line 13

Life Insurance Payments and National Insurance Contributions

You are entitled to claim premiums paid on the life of yourself, spouse and/or children to local insurance companies;
You are entitled to claim your contributions paid under the National Insurance Act.

Complete Tables d & e. Enter total on Line 15

Note:

The total of Life Insurance and National Insurance Contributions is limited to the lesserof:
Actual payments;
Ten per cent (10%) of Assessable Income; or
$8,000 (this is the most which can claimed).
Foreign Life Insurance premiums claims are restricted to 50% of the amount paid.
Please remember to attach the certificates from the Insurance Company.

Complete the relevant table. Add Lines 13 and 14 and enter total on Lines 15 & 123 of the return form.

SECTION 2 - SCHEDULE C

Other Allowable Deductions

Registered Home Ownership Savings Plan (RHOSP)

Relief is granted to a resident individual who makes contributions to an approved RHOSP up to a maximum of $6,000. Supporting documentation from the financial institution must be submitted.

Enter amount on Line 16

Owner Occupied Residential Property

The following Deductions are allowable:

Mortgage Interest paid for the acquisition, construction or improvements (renovations) to your home which is situated in St. Lucia up to $18,000 or$20,000 for first time homeowners.

Note: Supporting documentation from the bank or lending institution must be submitted.

Note:

Owner Occupied Dwelling House means a dwelling house situated in St. Lucia which is occupied by the owner, either alone or together with family, or occupied rent-free by members of the family.
House Insurance Premiums. Receipts mustbe submitted.
House Tax. Receipts mustbe submitted
As of Income Year 2008, the deduction for Mortgage Interest is not granted to an individual whose House Tax is outstanding.

Enter amount on Lines 17a, b & c

Repairs & Maintenance

Relief is granted for up to $10,000 for expenses reasonably incurred in the up-keep and maintenance of the owner-occupied dwelling/house. A detailed description of what repairs were undertaken to the property must be attached to the return. Bills and receipts should be kept and presented only upon request by the Comptroller.

Enter amount on Line 17d

Note: Where two or more persons are entitled to relief from Lines 17a through to 17d, the claims may be apportioned (among the parties involved).

Donations

A deduction is allowed in respect of amounts paid during the income year:

Under a deed of covenant for a period of not less than three years in favour of any religious, charitable, medical or educational institution or sporting body or fund of a public character approved by Cabinet;
To the St. Lucia National Trust;
To the Loan Fund established under the Further Education (Loan Fund) Act, 1969.

Note: The deduction is limited to 25% of your assessable income.

Enter amount on Line 18

Subscription for Credit Union Shares

A deduction of up to $5,000 is granted for payments by way of subscriptions for shares in any society registered under the Co-operative Societies Act or incorporated under the Building Societies Ordinance.

Enter amount on Line 19

Student Loan Interest

A resident individual can claim a deduction of a maximum of $3,000 in respect of the interest on a student loan taken to finance his/her tertiary education.

Enter amount on Line 20

Alimony and Maintenance Payments

The full amount of maintenance or separation allowance paid to a spouse under a Deed of Separation or Court Order is allowable.
The full amount of alimony paid to a former spouse from whom he/she is divorced.
The deduction allowable shall not apply unless the person receiving the allowance or alimony is chargeable to tax in St. Lucia.

Enter amount on Line 21

Solar Water Heater

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.

Enter amount on Line 22

Shares in Public & Private Companies

A resident individual who purchases new shares issued by a resident public company shall be allowed as a deduction, an amount not exceeding $5,000.

Enter amount on Line 23

Other

Relief is also granted to a resident individual who makes payments:

For the preparation of his tax return;
By way of subscriptions to a professional association.

Enter amount on Line 24

Add up all your payments and contributions under this schedule and enter the total on Lines 25 & 124 of the return form.

SECTION 4 - TAX CALCULATION

Add Lines 120 through to 124& enter total on Line 125.
If Line 125 is more than Line 112 enter NILor 0 on Lines 126through to Line 129
If Line 125is less than Line 112, subtract Line 125 from Line 112 & enter the difference or Chargeable Income on Line 126

Once the Chargeable Income is determined you can now use the Tax Calculation Chart in order to determine the total amount of income tax payable on your chargeable income earned during the year.

Tax Calculation Worksheet

If your Chargeable Income on Line 126 is	On the first (Line B)	Tax is … (Line B1)	On the remaining amount … (Line C)
From $0 to $10,000	—	—	10%
From $10,001 to $20,000	10,000	1,000	15%
From $20,001 to $30,000	20,000	2,500	20%
More than $30,000	30,000	4,500	30%

The total of B1 and C1 is your tax on chargeable income. Enter on Line 127 of your return.

Example 1

If Chargeable Income is $7,200, calculate the tax as follows:

Chargeable income	$7,200.00
Tax on amount (10%)	$7,200.00	$720.00
Tax on Chargeable Income		$720.00

Example 2

If Chargeable Income is $16,728, calculate the tax as follows:

Chargeable income	$16,728.00
On the first	$10,000.00	$1,000.00
On the remaining balance (15%)	$6,728.00	$1,009.20
Tax on Chargeable Income		$2,009.20

Example 3

If Chargeable Income is $23,334 Calculate the tax as follows:

Chargeable income	$23,334.00
On the first	$20,000.00	$2,500.00
On the remaining balance (20%)	$3,334.00	$666.80
Tax on Chargeable Income		$3,166.80

Example 4

If Chargeable Income is $56,361 Calculate the tax as follows:

Chargeable income	$56,361.00
On the first	$30,000.00	$4,500.00
On the remaining balance (30%)	$26,361.00	$7,908.30
Tax on Chargeable Income		$12,408.30

Payments & Credits:

Enter Double Taxation credits and any other credits paid during the income year on Line 130.
Enter PAYE amounts as per your TD5 Slip (Annual Salary Slip) on Line 132.
Enter Prepayments (installments) made during the year on Line 133.
Enter total of Lines 130, 132 & 133 on Line 134.
If total on Line 129 is greater than total on Line 134 enter the difference on Line 135.

Line 135 denotes amounts outstanding in taxes to the Department.

If total on Line 134 is greater than total on Line 129 enter the difference on Line 136.

Line 136 denotes amount overpaid in taxes to the Department.

SECTION 5

Payments

Taxpayer should indicate which manner preferred in receiving refund by checking Boxes 150, 151 or 152

SECTION 6

General Declaration