Cash to offspring

[Dizmal]

My wife just received a �45k payout following our divorce. It was double what either of us expected. She is complaining that she must pay tax on it. If she gives a lump sum of say �5-10k to each of our two offspring (20s) would they need to pay tax on it?

[dzug]

I'm not clear WHY she needs to pay tax on it, apart from tax on the interest once it's invested.

If it went to your children they would be liable for tax on the interest too unless they put it (some) in an ISA.

[Loosehead]

There is no tax on a divorce settlement, where has she got this notion?

[Hard@it]

Dizmal, do you know this for a fact or is your wife just telling you - it sounds like it. Why would you pay tax on monies that you both already own?

[Gef]

She's at it. If you have just had to give her 45K then it's not your problem. Tell her to get stuffed.

[Englandfan]

She doesn't have to pay tax on divorce payment - she can only give away a certain amount (maybe �3000) per year, however it could be deemed a PET if she lives for 7 years afterwards....!

[Dizmal]

I think I've had the wool pulled over my eyes!
Thanks for the answers, fellow abankers, I'll try and increase the kids' stakes now.