Tax on Child Maintenance

[ahanna]

Hi. My child's father has agreed to make a lump sum child maintenance payment. There is no court order, it is voluntary. He never took paternity and refuses to sign a private agreement confirming the money is child support. It is not a stream of payments, just one lump sum.

HMRC will probably see this as income in absence of any proof and tax. What can I do? Has anybody experienced a similar situation? Would a self-declaration by myself be acceptable to HMRC? Is there anything else I can do to keep this money for my daughter as tax free?

Thanks in advance to all who can advise.

Hi. My child's father has agreed to make a lump sum child maintenance payment. There is no court order, it is voluntary. He never took paternity and refuses to sign a private agreement confirming the money is child support. It is not a stream of payments, just one lump sum.

HMRC will probably see this as income in absence of any proof and tax. What can I do? Has anybody experienced a similar situation? Would a self-declaration by myself be acceptable to HMRC? Is there anything else I can do to keep this money for my daughter as tax free?

Thanks in advance to all who can advise.

This is not income or a capital gain. You are not selling anything, doing any trade etc. the only tax implications are to ensure neither of you are impacted by higher rate tax payer child benefit tax rules. At worst this is a gift which is not taxable income unless caught by inheritance tax rules which as you are not inheriting his estate is unlikely to bother you.

On a different know the CSA can make him pay child support and be DNA tested. I suggest you get maintenance for your child unless you can afford not to do so.