I am getting myself into a tizzy worrying about my post divorce situation.
After my divorce 2 years ago I recieved a ''Clean Break'' settlement which meant I had a lump sum from the sale of the marital home for me to rehouse myself and my 2 children, and put down as a deposit on my new house.
All well and good but I didn''t inform the child tax/working tax credit people of this at the time. I assumed the solicitor would of informed me that they should be told but she didn''t say anything. I''m single, I work part time, still recieve a small amount of tax credits and apart from this life is good now!!
So, do lump sum divorce settlements count as income? the literature in the working guide to claiming tax credits is not very clear at all.
This is on my mind and is worrying me so any advise/ experience on this would be hugely appreciated.
I would think not, as it isn''t new income more a division of assets / capital you already own.
And tax credits aren''t based on anything you do or do not already have like other benefits are, so I,d think you are ok.
(solisitors don''t advise on benefits etc, so couldnt expect a solisitor to tell you when you need to inform benefits people of something)
You would only need to declare the interest that lump sum earns if the interest is over £300(?). I had a similar situation 2 years ago, and did declare my lump sum(from the sale of FMH), but was told it was only interest earned on it that I was required to declare.