Robertson v HMRC (SpC 494)

Maintenance loan or a gift?

Mr and Mrs R were divorced in 1987 and under a maintenance agreement Mr R agreed to pay one-half of his salary to Mrs R until she re-married died or a further agreement was made.
Payments were made under the agreement until April 2000 when the monthly level was £1 527. Until that time Mr R was receiving tax relief in respect of the payments and Mrs R was taxed on them. Subsequently tax relief was withdrawn and the payments were not taxed in the recipient's hands.
The change meant that Mr R became a higher rate taxpayer. Mr R then reduced the monthly payment to £1 000 but he paid Mrs R a lump sum of £26 000 which she could draw on to 'top-up' her monthly income. There was no change to the previous agreement and...