Alimony question

Hi, my fiancee will be arriving in the UK in the next few months on the Fiancee visa, so is unable to work until the Spousal visa is done after we are married. (love saying that)

So the only income she will get is an alimony from her ex husband. I take it she will have to file for US taxes, but will she be taxed for this income here too? Also about her starting up a bank account here without any credit history as such here yet? Are there any tips or pitfalls we have to be aware of in setting one up?

Much thanks and appreciation in anticipation.

I dont know anything about alimony, so I am going to steer clear from that one, but take a look at this recent thread re: establishing credit history. http://talk.uk-yankee.com/index.php?topic=61537.0

Many people have had many different experiences opening bank accounts - some have not been able to open an account at all without a monthly income and some had no trouble. I was able to easily open an account before I found a job, but this was perhaps becuase my husband is some kind of premier account holder and came with me to open to account.  (I dont know if alimony will be considered income for this purpose)

So the only income she will get is an alimony from her ex husband. I take it she will have to file for US taxes, but will she be taxed for this income here too?

A quick call to HMRC will confirm the UK stance, but I strongly suspect that the answer will be yes, it’s taxable in the UK. Alimony is specifically mentioned in the US/UK Tax Treaty, and that’s usually a good indication of a squabble over which country has the right to tax the income (Article 17). Deductible alimony payments are an exception to the US saving clause. The amount of the alimony payment will be a factor in how the recipient might select in the future whether to be taxed in the UK on the remittance or arising basis, or in the US if the funds stay there. This is a nonprofessional opinion.

interesting!

From what I know spousal support in the uk is not taxed. My husband works in Qatar and my spousal support will not be taxed nor considered when calculating child tax credits.  I believe that the worry will be if the us decides to tax this income. However there are many way around being taxed. The first and foremost being that if ones income is below a certain amount it is tax free when overseas. This may work in your partners favour.

Well, your reply has made me scramble all over the Directgov. website, which states:
If you're receiving (maintenance) payments - You won't have to pay tax on it.
Your experience seems to indicate that the geographical source of the payment may have no bearing for UK purposes. But for the UK/US it's covered by the treaty and, given the UK position above, would be to the advantage of the USC living in the UK (accepting all parties agree said Alimony = maintenance).

Cool! Thanks for the advice....will follow up and will state later in this thread what the outcome is when its fully resolved