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Child maintenance - tax records as evidence of income?(5 Posts)
Hi, am new to this. Just wondering what can be done to assess income where the NRP has income from salary, bonus and capital gains in any given year?
At present, our CM is paid under a consent
order which is several years old (neither of us has applied to vary it). If I did apply to vary it, I understand that even though ex-h has more money now, I could end up with less for the DCs because a lot of his income is from bonuses and shares (which he has acquired as part of previous years' bonus payments), neither of which the CSA takes into account as it just looks at payslips, which only show monthly salary payments.
So I was wondering: can the NRP be made to provide his tax records for the previous year, to show his total "money in". If so, which forms would you be asking for? I have never done a self-assessment so haven't a clue but pretty sure P60 wouldn't show the money realised on sale of shares, for example.
Any help would be great.
You wouldn't apply to the court to vary it, as if either one of you isn't happy with the outcome you could go to the CSA.
The CSA don't in the first income take dividend income in to account, but they can be prompted to ask for bonus income and they will take that in to account if they think it fair to do so.
They can only take into account dividend income after the first assessment has been done, after which you'll have to apply for a "variation" (under which they will take dividend income in to account).
Capital gains will never be income. If is is income, for example if he buys and sells houses for a living, he'll pay income tax on it and it will be caught anyway.
Thanks Collaborate. Ex-h works in the City and the greater part of his compensation does come from bonus, most of which is, in turn, paid in shares. As I understand your post, if he gets a £200,000 bonus, £150,000 of which is paid in shares which he cannot sell for 3 years (but does sell them as soon as he is able, for £150,000) then the CSA only MAY consider the £200,000 bonus and if it does, it will actually only take the £50,000 cash element into account? And won't take the £150k gain 3 years later into account at all?
Let's use a hypothetical situation:
NRP's salary is £150,000 so net weekly income is £1750.
The 2 children live with the PWC.
Maintenance is agreed during ancillary relief proceedings by reference to the CSA calculator at £1,300 pcm.
NRP is given a £200,000 bonus as above,£150,000 of which is in shares he can't sell immediately. He sells them in a later year, realising a £150,000 gain.
PWC never has any way of knowing what the actual bonus details are, nor what gains are made in any given year by selling bonus shares from previous years, but it is clear from the NRP's lifestyle that his lifestyle far outstrips his £150,000 "income". E.g. His monthly net salary is £7,500. He rents a house for £4,000 a month, so rent plus CM alone comes to £5,300. He has several holidays a year (without the DCs), staying at top-notch five star resorts, travelling business class; eats out several times a week; and spends tens of thousands of pounds pursuing an expensive hobby.
The PWC has a "normal" job, a normal little terraced home, and after childcare and mortgage each month, struggles to make ends meet. Certainly no holidays for the DCs.
So in this situation, is it not possible to receive a greater proportion of the actual overall earnings from employment of the NRP as CM? It seems completely ridiculous that someone could earn £350k in a year but only pay CM by reference to £150k!
There is a cap on income taken into account by the CSA. Currently it is £2000 a week of net income, but it will be £3000 a week of gross income when the new system comes in next month.
With income at those levels you could be applying to the court for a top up payment. You should find a solicitor on the resolution website.
Thanks again. To apply to court for a top-up order, do you have to have an actual CSA assessment in place first?
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