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S Gibson (TC4048)
The taxpayer worked for her husband’s business until the couple separated in 2009.
She continued to receive a salary of £12 000 and the use of a company car until March 2012. HMRC said the vehicle was chargeable benefit and raised an assessment.
The taxpayer appealed saying her ex-husband provided her with the car as part of their divorce settlement. He paid for repairs using his personal bank account and chose to pay her salary as part of the sum the county court ordered him to give her.
The First-tier Tribunal said the court order supported the taxpayer’s assertions.
The tribunal judge said “Maintenance payments under agreements or court orders made in the EU member states since 15 March 1988 are generally outside the UK tax system… Payments are made without deduction of tax and the recipient is not taxed on the receipt of the payment....
