Q&A: Are my overseas maintenance payments taxable?

Tax Advice » July 29, 2021

Each week we receive numerous enquiries from clients which are usually quite quick to answer.  Over the coming weeks, we will be publishing some of the questions received and our answers to them.  Please note we have changed some parts of the questions to protect our client’s information.


I live in the UK but receive maintenance payments from my ex-husband who lives in Switzerland.  Is this income taxable in the UK? Do I need to report it anywhere?


In short, no.  The payment of foreign maintenance payments are not taxable.

The statutory basis for this is contained in Income Tax (Trading and Other Income) Act 2005 (ITTOIA 2005), Pt 6, Ch 8.

ITTOIA 2005, s 727 provides that no liability to income tax arises under Pt 5 in respect of an annual payment if it:

(a)            is made by an individual; and

(b)            arises in the UK.

There are certain exceptions to this which are not relevant to maintenance payments.

ITTOIA 2005, s 730 (foreign maintenance payments) provides that no liability to income tax arises under Pt 5 in respect of an annual payment if:

(i)              it is a maintenance payment;

(ii)            it arises outside the UK; and

(iii)           had it arisen in the UK it would be exempt from income tax under ITTOIA 2005, s 727 (certain annual payments by individuals).

The section goes on to explain that a ‘maintenance payment’ is a periodical payment which meets one of two conditions. Condition A is that the payment is made under a court order or a written or oral agreement. Condition B is that the payment is made by a person:

(1)            as one of the parties to a marriage or civil partnership to, or for the benefit of, and for the maintenance of, the other party;

(2)            to any person under 21 for that person’s own benefit, maintenance or education; or

(3)            to any person for the benefit, maintenance or education of a person under 21.

The word ‘marriage’ is defined as including a marriage that has been dissolved or annulled.

It should be noted that these exemptions for maintenance payments do not extend to income arising under an outright transfer of capital by one party to the marriage to the other. If there is such an outright transfer of capital, then income arising from that capital will be taxed in the hands of the recipient in the normal way.

It should also be noted that these exemptions apply only to maintenance payments made by individuals. Sometimes the financial arrangements made in the context of divorce or relationship breakdown involve the provision of income to one party in the form of payments made by trustees, either of a pre-existing trust or of a new trust established by one of the parties for the purpose. Such trust income will not fall within these exemptions and will be taxable in the hands of the recipient in the normal way unless, exceptionally, it falls within the income tax settlement rule, where it would be attributed to the settlor.

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