The TACS Partnership looks at various tax implications of separation and divorce and examines some of the pitfalls and opportunities to watch out for.
A couple going through a separation or divorce is unlikely to have tax planning at the forefront of their minds, and they may even be unwilling to cooperate in such planning; but early consideration of the tax issues can be essential in order to avoid making costly mistakes.
What follows is a brief summary of the main taxes.
Income tax
In general, the payment of maintenance payments is tax neutral; the spouse receiving those payments does not incur an income tax liability, and there is no tax relief for the paying spouse.
There is one exception where one of the parties was born before
