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What are we each entitled to in our divorce settlement?

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tax credits and divorce settlement

  • diamond 43
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23 Aug 12 #351310 by diamond 43
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Hi everyone.

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.:(

  • sillywoman
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23 Aug 12 #351318 by sillywoman
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Lump sums of any kind would count as savings and anywhere you received it to put down on a house for you and the children, so dont worry about it.

  • Elphie
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23 Aug 12 #351320 by Elphie
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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)

  • MrsMathsisfun
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23 Aug 12 #351323 by MrsMathsisfun
Reply from MrsMathsisfun
If you received your share then put it into a property I dont think you will have any problems.

If the money is sat in a saving account it might be a different matter.

  • rubytuesday
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23 Aug 12 #351324 by rubytuesday
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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.

  • diamond 43
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24 Aug 12 #351700 by diamond 43
Reply from diamond 43
Thank you everyone for your prompt and really reassuring comments. I had a much better nights sleep last night!!

I think I was letting my mind run wild during early hours of the morning, and one thought seems to lead to another (worse one!)

Still, it''s fab that there is somewhere to go for some sound and sensible advice.

Keep up the great work!:)

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