divorcing mum - is all maintenence taxable?

pammyM_2

Sorry to say I'm in final stages of divorce. My income from self employment is very low (£3K p.a.) and I am receiving Working Tax Credit and Child Tax Credit (4K p.a.) My husband has now agreed maintenence for the next 8 years until my 60th birthday at £11K p.a. which will be partly child support and partly spousal maintenence. Our 2 sons are 15 and 20 years old.
What will I have to declare on my tax form - will I have to pay income tax on everything even though my husband has already paid higher rate tax on it already?

CIS

AFAIK maintainence is not taxable as tax on it has been paid, you would be liable for tax on only any money earned from the maintainence like interest.

Cook_County

From the figures and details you have given the maths is going to be much more complex than CIS seems to realise.

Maintainance and child support is indeed not subject to UK income tax.

However, you should qualify for childrens tax credits as well as council tax benefit (as well as child benefit).

Because the amounts of money coming in affect means tested benefits you may lose some benefits. Therefore you may need the ex to compensate you for benefits lost. I would recommend spending time at the Citizens Advice Bureau with an adviser who is familiar with the labyrinthian benefits system to make sure you are getting everything.

sarahlouise210

Cook_County wrote:

From the figures and details you have given the maths is going to be much more complex than CIS seems to realise.

Maintainance and child support is indeed not subject to UK income tax.

However, you should qualify for childrens tax credits as well as council tax benefit (as well as child benefit).

Because the amounts of money coming in affect means tested benefits you may lose some benefits. Therefore you may need the ex to compensate you for benefits lost. I would recommend spending time at the Citizens Advice Bureau with an adviser who is familiar with the labyrinthian benefits system to make sure you are getting everything.

I would have thought that the ex agreeing to pay £11000 per year for 8 years where there are no small children was enough "compensation!!"(for loss of benefit) OK, the maintenance will affect council tax benefit but she will have an income of £18000 per year. Many of us cannot say that and dont receive any benefits over and above CTC. The best news to the OP is that maintenance is not taxable and in addition is not taken into account for tax credits so she will not lose her entitlement. WTC will still be payable even when CTC ceases as long as income remains low.

pammyM_2

Thanks to you all for your advice. I will contact the CAB as my solicitor and IFA are not in a position to comment re tax. After 30 years of marriage I've never had to deal with the mysteries of taxation and the benefit system before and realise I am lucky if only in that one respect.