working tax credits affected by divorce settlement

Hello,
Earlier this year my divorce settlement ruling was
That I kept the family home and my husband received the money from a joint business we had together, albeit I was the shareholder. It was agreed that the company would be liquidated at the earliest opportunity which is now this week. I have received a cheque today which I have been asked to bank and pay diectly to my husband who will then pay me back the amount of tax payable.

Since separation my household income dropped significantly and As I work part time I applied for working tax credits earlier this year which I now receive.

I am concerned that this payment from the liquidators will be counted as income although I don’t actually receive any of it and I’m worried about what I should do.
Any advice would be appreciated.
Thanks for listening.

If it's taxable it sounds like it will count as income.

Why is the cheque payable to you if you no longer have an interest in the company?

Who is the cheque from?

Hello,

I was the shareholder and not my husband.
The cheque is from the liquidators.

Kind Regards

But if you had transferred your interest to him then you no longer would be?

What time limits did the Court set for you transferring your interest to your ex?

Might be worth checking with tax credit helpline but if the money is from the sale of an asset and not subject to income tax then it won't be income so won't affect your tax credits. If it is a dividend payment or pay that you were owed then it will.

Thank you for your advice.

It is understandable that you are concerned about how this payment from the liquidators may affect your tax credits.

According to the UK government's website, any money you receive as a result of the liquidation of a business is considered to be taxable income. However, it is important to note that tax credits are calculated based on your household income, not on any individual payments you receive.

If you are concerned about how this payment may affect your tax credits, it may be helpful to contact the Tax Credit Office and explain your situation. They may be able to provide more information on how this payment will be treated for the purposes of calculating your tax credits.

In the meantime, it is important to ensure that you report this payment to the Tax Credit Office as required. Failing to report income that is subject to tax can have serious consequences, including fines and penalties.