Reducing your Income Tax
In this section:
Maintenance Payments Relief
Maintenance Payments Relief can reduce your tax if you make maintenance payments to your ex-spouse or former civil partner. It is an amount that we take off your tax bill - so you can only claim it if you pay tax.
Who can get Maintenance Payments Relief?
You can get Maintenance Payments Relief if:
- you or your ex-spouse or former civil partner were born before 6 April 1935
- you're separated or divorced or the civil partnership has dissolved and you're making the payments under a Court Order
- the payments are for the maintenance of your ex-spouse or former civil partner (provided they aren't now remarried or in a new civil partnership) or for your children who are under 21
For the tax year 2008-09 it can reduce your tax bill by the lower of the following two amounts:
- ten per cent of £2,540 (£254) – this will apply where you pay Maintenance Payment Relief of £2,540 or more a year
- ten per cent of the amount you've actually paid – this will apply where you pay Maintenance Payment Relief of less than £2,540
You can't claim a tax reduction for any voluntary payments that you make for a child, ex-spouse or former civil partner.
Maintenance Payments Relief - worked example
You're 74, divorced, have taxable income of £20,000 and pay your ex-spouse £1,200 maintenance a year (£100 per month):
your taxable income is £20,000
your tax-free allowance is £9,030 (age-related Personal Allowance for 65 to 74 year olds)
we subtract your tax-free allowance (£9,030) from your taxable income (£20,000) - that leaves you with taxable income of £10,970, but you can use your Maintenance Payments Relief to reduce your tax bill
you make maintenance payments of £1,200 so are due tax relief of £120 (10 per cent of £1,200)
this amount is deducted from your tax bill
How to claim Maintenance Payments Relief
To claim Maintenance Payments Relief simply contact us by following the link below.
If you have already claimed Maintenance Payments Relief and you receive a 'PAYE Coding Notice' this will tell you how much you are getting.
If you fill in a Self Assessment tax return we'll ask you to include details of your Maintenance Payments Relief claim.
Understanding your PAYE Coding Notice
Do you need to complete a tax return?
If you receive maintenance payments
You do not pay tax on any maintenance payments that you receive.
More useful links
Do you have to pay tax in retirement?
