The taxman is probably the last person on your list of people to inform that your marriage has come to an end – if indeed he made it on the list at all. However, when you get a divorce, you’ll need to inform HM Revenue and Customs (HMRC), otherwise you could end up paying too much (or too little) tax.
Let HMRC know about your divorce
The tax code you see on your payslip determines how much income tax should be taken from your pay.
For instance, one of the more common tax codes, 1250L, means that you’re entitled to the normal tax-free personal allowance. At the time of writing, this is £12,500.
If you are married or in a civil partnership, you may have an ‘M’ or an ’N’ at the end of your tax code. The ‘M’ means that you have received 10% of your spouse’s tax-free personal allowance and the ’N’ means that you have transferred 10% of your personal allowance to your spouse. Having one of these codes on your payslip means that you and your spouse are benefiting from the Marriage Allowance.
If your circumstances change, you must inform HMRC. If you get divorced or dissolve your civil partnership, you can cancel your Marriage Allowance online. Failure to do so may end up in you paying too much tax or receiving a tax bill at the end of the year because you’ve paid too little.
Remember to update your Will, too
Informing HMRC of your split from your spouse is just one item on a long list of administrative tasks you’ll have to do when you divorce.
For example, it’s also important to make sure your Will is up to date, so that should the worst happen, it’s clear who you want to inherit your estate. Any gifts to a spouse or appoint of them as an executor made during the marriage will automatically fail upon divorce, meaning part of your estate may be regarded as intestate or there may be no one to distribute the estate.
Make sure you don’t miss anything
If you’re going through a divorce, it’s highly recommended that you seek independent legal advice from an experienced divorce lawyer. A good solicitor should be able to guide you through the process and ensure that nothing is missed.
To find out how we could help with your divorce, book you free initial consultation with one of our expert divorce lawyers today.
This article was written by Lauren Howells and Megan Bennie.