Tax on maintenance payments
Discussion
If one has to make maintenance payments to their ex, for their child (global maintenance), by order of the court.
What are the tax implications of this?
About 35% of my net income now goes out as maintenance, does HMRC now see that i "earn" 35% less than before and thus i'm taxed less?
What are the tax implications of this?
About 35% of my net income now goes out as maintenance, does HMRC now see that i "earn" 35% less than before and thus i'm taxed less?
Simply: No.
Unless you are approaching your 90th https://www.gov.uk/income-tax-reliefs/maintenance-...
You're not earning less, you are contributing a proportion of your income to the costs of raising your children, just as you would be if you weren't separated.
Unless you are approaching your 90th https://www.gov.uk/income-tax-reliefs/maintenance-...
You're not earning less, you are contributing a proportion of your income to the costs of raising your children, just as you would be if you weren't separated.
bunchofkeys said:
randlemarcus said:
No. But its fine, because they arent taxable income for the recipient, so you're paying her income tax as well. Good, innit?
What the ass!!??So that's "tax free" income to them?!
Whoever is paying the maintenance (not always the Dad) should get Tax relief for the amounts paid, and the amount of Maintenance should be taken into consideration wjen tax credits / benefits are dished out.
This would probably entice more Dads to cough up and also allow the Goverment to get most of the tax relief on the maintenance back through reduced benefits.
For the person receiveing the benefits, there really is no incentive to go and a get a job, even part-time, when everything is given on a plate...
This would probably entice more Dads to cough up and also allow the Goverment to get most of the tax relief on the maintenance back through reduced benefits.
For the person receiveing the benefits, there really is no incentive to go and a get a job, even part-time, when everything is given on a plate...
I share your pain, I pay out nearly £5k a month to my ex, on top of that I bought her a 4 bed detached house in Bucks, and a £35k car, and the worse bit, a big chunk out of my pension which due to government rules on what I can put in, I will never be able to replace before I retire. All to a woman who didn’t contribute 1p during our 5 years of marriage.
I’ve tried to get custody of my kids but been told unless the ex agrees (why would she with such a great income stream attached to them) then I’ve got no chance. Now attempting 50% custody with payments adjusted to match.
You may want to go back to court to get the global order changed to separate CM / SM amounts that way it’s easier to adjust payments to changes in your circumstances via CMS
I’ve tried to get custody of my kids but been told unless the ex agrees (why would she with such a great income stream attached to them) then I’ve got no chance. Now attempting 50% custody with payments adjusted to match.
You may want to go back to court to get the global order changed to separate CM / SM amounts that way it’s easier to adjust payments to changes in your circumstances via CMS
super7 said:
Whoever is paying the maintenance (not always the Dad) should get Tax relief for the amounts paid, and the amount of Maintenance should be taken into consideration wjen tax credits / benefits are dished out.
This would probably entice more Dads to cough up and also allow the Goverment to get most of the tax relief on the maintenance back through reduced benefits.
For the person receiveing the benefits, there really is no incentive to go and a get a job, even part-time, when everything is given on a plate...
Why on earth should you get tax relief on the money you pay to your kids?This would probably entice more Dads to cough up and also allow the Goverment to get most of the tax relief on the maintenance back through reduced benefits.
For the person receiveing the benefits, there really is no incentive to go and a get a job, even part-time, when everything is given on a plate...
You have to pay for them out of taxed income because they are *your* children.
The idea is to give your kids every advantage you didn't have, in order to advance things forward. You shouldn't need tax relief to encourage someone to "cough up" - it is your responsibility.
I'm amazed to discover that these days maintenance payments are not considered when working out means-tested benefits. I'm way out of the loop on the whole CM and benefits stuff but when I worked at the CSA 20 years ago we definitely had cases where the child maintenance in specific cases hit a point where the recipient lost some (or all) of their benefits. Surely the amount of benefits provided includes a calculation for dependents? Meaning that the taxpayer now gets hit with a bill for childcare where, arguably, the parents jointly, even though separated, can cover it.
As to whether payments should be tax deductible, Jesus. Imagine if that were the case- there'd be marital arbitrage all over the place. As said above- it's not a tax deductible expense, it's a contribution towards the upkeep of *your* child(ren).
As to whether payments should be tax deductible, Jesus. Imagine if that were the case- there'd be marital arbitrage all over the place. As said above- it's not a tax deductible expense, it's a contribution towards the upkeep of *your* child(ren).
EddieSteadyGo said:
super7 said:
Whoever is paying the maintenance (not always the Dad) should get Tax relief for the amounts paid, and the amount of Maintenance should be taken into consideration wjen tax credits / benefits are dished out.
This would probably entice more Dads to cough up and also allow the Goverment to get most of the tax relief on the maintenance back through reduced benefits.
For the person receiveing the benefits, there really is no incentive to go and a get a job, even part-time, when everything is given on a plate...
Why on earth should you get tax relief on the money you pay to your kids?This would probably entice more Dads to cough up and also allow the Goverment to get most of the tax relief on the maintenance back through reduced benefits.
For the person receiveing the benefits, there really is no incentive to go and a get a job, even part-time, when everything is given on a plate...
You have to pay for them out of taxed income because they are *your* children.
The idea is to give your kids every advantage you didn't have, in order to advance things forward. You shouldn't need tax relief to encourage someone to "cough up" - it is your responsibility.
Pay for your children, people. Don't have them if you don't want to.
Love how everyone jump’s down the OP’s throat as if he’s somehow seeking to evade responsibility for children. He could just be paying spouse maintenance to a lazy entitled ex without any children in the picture whatsoever.
The question of whether there are tax implications is also reasonable especially if you consider the certain marginal tax rates at 65% or more which could mean that the top slice of one’s income is disappearing in tax and maintenance. Such punitive confiscation of income would seriously diminish any incentive to work and earn more.
The question of whether there are tax implications is also reasonable especially if you consider the certain marginal tax rates at 65% or more which could mean that the top slice of one’s income is disappearing in tax and maintenance. Such punitive confiscation of income would seriously diminish any incentive to work and earn more.
Integroo said:
EddieSteadyGo said:
super7 said:
Whoever is paying the maintenance (not always the Dad) should get Tax relief for the amounts paid, and the amount of Maintenance should be taken into consideration wjen tax credits / benefits are dished out.
This would probably entice more Dads to cough up and also allow the Goverment to get most of the tax relief on the maintenance back through reduced benefits.
For the person receiveing the benefits, there really is no incentive to go and a get a job, even part-time, when everything is given on a plate...
Why on earth should you get tax relief on the money you pay to your kids?This would probably entice more Dads to cough up and also allow the Goverment to get most of the tax relief on the maintenance back through reduced benefits.
For the person receiveing the benefits, there really is no incentive to go and a get a job, even part-time, when everything is given on a plate...
You have to pay for them out of taxed income because they are *your* children.
The idea is to give your kids every advantage you didn't have, in order to advance things forward. You shouldn't need tax relief to encourage someone to "cough up" - it is your responsibility.
Pay for your children, people. Don't have them if you don't want to.
There are many Dads who don't pay a penny for their kids, and their ex's are on benefits..... benefits which YOU are paying for!!! So before you have a pop at Dads who pay, think of how much your paying for the Dads that don't.
And whilst the idea of a tax break sounds wrong, most divorced dads are left in a s
t state when a marriage breaks down and have to radically change their lifestyle to support 2 households, whilst you look after 1. And if you got over your initial shock at the suggestion of a tax break you might have read where I said that most of that tax break could be clawed back by including maintenance payments in the means test for benefits, so whats saved on the benfits covers the cost of the tax break.It's balancing incomes between two divorved people. You as a disinterested tax payer would SAVE money on not paying out so much benefits to a ex that's getting a healthy maintenance payment AND FULL benefits!!!!
super7 said:
Sore point obviously....
The sore point is people whinging about "paying £1k" for their own children and expecting tax relief, as if they are somehow doing more than their fair share.I pay significantly more for my own children, starting with £3.5k/month school fees, and I don't ask anyone for help or begrudge a penny.
It's all about personal responsibility - you make your own decisions as an adult, and you pay the costs associated.
There are unfortunate situations where children are forced into a custody which is not just inappropriate for them but also damaging to their welfare - in some cases lastingly so.
If you were the non-custodial parent would YOU voluntarily pay to have your kid's life destroyed or happily subsidise their destruction?
If you were the non-custodial parent would YOU voluntarily pay to have your kid's life destroyed or happily subsidise their destruction?
People paying support are NOT like for like with those just paying to raise their kids.
The support payments go to the parent and the paying parent has zero say on what happens to the funds after that - it's hardly like a regular couple having a chat over tea time to see if they want to fork out on dance lessons!
The support payments go to the parent and the paying parent has zero say on what happens to the funds after that - it's hardly like a regular couple having a chat over tea time to see if they want to fork out on dance lessons!
EddieSteadyGo said:
Maybe that is a possibility. Except for the small issue that he said he was paying maintenance for his child in his original post....
Quite right, must have missed that bit!I agree with others saying child maintenance should reduce benefit eligibility. My ex gets £3.5k net monthly in benefits and child support. Why would she ever want to operate a check-out in Sainsbury’s when she can sit on her backside having hair and nails done whilst netting £60k equivalent income. I even have the kids every weekend and during her umpteen childless foreign holidays per year (like this week) so she only has to do the school run and give them tea yet maximises her entitlements as the “primary” caregiver.
Gassing Station | Finance | Top of Page | What's New | My Stuff