Arcadia

Hi There.

Scenario: Two UK citizens, married in the UK,can no longer stand the sight of each other and want to divorce.

Have reached an amicable settlement before seeing an Abu Dhabi based solicitor regarding house in the UK and a cash settlement.

So, question is..If The woman was to have 40,000 pounds sent to her UK account once the divorce is finalised, is this liable to being taxed?

Thanks.

The Dean

Is she UK-resident or UAE-resident?

Arcadia

I dont quite know how to answer this, so excuse my blonde moment..She is UK citizen with a UAE residency visa. been Living in AD for 10 years.

The Dean

If he and she both reside in the UAE on a full-time basis, why send money to a UK-based bank account? Is she planning to return there once divorced?

Arcadia

Yes, Moving into the marital home which he is ''giving her'' as part of the settlement..He will be staying in Abu Dhabi. She will be living and eventually working in the UK. A UK bank account would be the only solution really as she would need to access the money immediatly, also without having a job I would think most offshore banks wouldnt let her have an account..maybe I'm wrong.

The Dean

I think you are tax-free then - Meow will correct me if I'm wrong.

Arcadia

Thanks for your help.

kittycat1

money earnt in the UK is liable for tax so I would say yes she would have to pay tax on this as the property is in the UK- I think it counts as unearned income- I know any income I earn from my business in the UK is taxable- speak to your accountant in the UK- if you dont have one I can recommend mine if you pm me

KC
x

Arcadia

I've pm'd you Kittycat..Thanks.

Victor Meldrew

But if the £40,000 is sent to the UK from a UAE account (which I think is what is being said?) that wouldn't be liable to tax as it is 'income' from overseas whilst both were resident overseas.

If the house is sold in the UK, and the £40,000 is from this, it still shouldn't be tax liable if both if the people are resident overseas when the house is sold.

That is my understanding

Meow

Tut - much mis-information, as usual.

There is no tax liability on a divorce settlement in the UK, so she will not have any liability on the capital she receives (£40k).

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Meow

Incorrect. A divorce settlement is not income.

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kittycat1

Meow- AHA!

And that is why I design knickers for a living and am not a financial advisor!

Meow

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The Dean

And how difficult is that?