CMS calculations and mortgage payments

[FallenFigs]

hoping for some perspectives as struggling to get a clear answer on this.

me and DC live in the family home
stbxh lives in a property he purchased. He would only move out on breakdown of marriage to an owned property, refused to rent.
both properties and mortgages in his name. Effectively on large mortgage with sub accounts, smaller amount on FMH and larger on his new place.

For 18 months, whilst going through mediation, he has paid CM at what would be the calculated rate and I have paid him 50% of the mortgage for the property in which I live - FMH. Informal agreement. I have paid all bills, insurance, repairs on FMH in that time.

he has now stopped paying CM. I have stopped paying him 50% of the FMH mortgage in response.

he says I now need to pay 50% of both mortgages as they are shared assets.

if I go to the CMS, which (if any) mortgages will they deduct from his calculation? The help page says none, because he retains a legal and beneficial interest in the former family home until financial separation is finalised. Is this correct in practice?

and is there any way I ‘should’ be paying 50% of the mortgage on his place too?

I’m going in circles on this.

Solicitor dealing with overall separation isn’t best placed to deal with the CM question. I need to make sure I don’t score an own goal.

if the above is the case, then the webpage on gov.uk for CMS variations is seriously misleading. It clearly states that variations for a mortgage where the paying parent has a legal and beneficial interest would not be deducted

Yes it is. It quotes one part of the regulations but not the other.

Yes, although a lot of people at CMS are clueless about their own rules so they might make the decision you want and he will have to appeal.

Hang on, that is para 65, debts.

Para 67 is mortgages, loans etc.

iii) the property was the home of the applicant and the person with care when they were a couple and remains the home of the person with care AND

iv) the non-resident parent has no legal or equitable interest in and no charge or right to have a charge over the the property.

so these are crucial clauses. It can’t be deducted?

however, I don’t know what it says ‘certain mortgages’ in the title that heading and does not define what constitutes an in scope mortgage or not.

So, does it fall under para 65 or para 67?

No, you're making the same mistake as others do. Para 65(3)(h) mentions mortgages of a specific type. It is the carve out to para 67.

https://kiddspoorlaw.co.uk/mortgage-maintenance/

I do not work for this firm but it's a nice summary.

Nope you’ve lost me now. What’s a carve out?

why are there two different statements about mortgages?

well yes but that article is saying it depends! Which is exactly my problem.

Because one is about mortgages in general, para 67. It's so that, for example, a non-resident parent cannot claim on a mortgage on their own house because the children live there some of the time.

The other, para 65, is about the mortgage on the FMH that the recipient of CM and their children still reside in and that was taken out before separation. That one is exempt from the general rule in para 67 (i.e. it is a carve out).

So, in summary. He can have deducted what he is paying on the mortgage on the FMH from what he is assessed as having to pay under CMS.

Ok.

Is the deduction the full amount, or is it a %, so if the mortgage is £700/month he could achieve a deduction of 100% of that

If so, that would zero out any CM therefore I push on for financial settlement. And do I position to him that, ok, let’s set maintenance aside but we need to split 50/50 of the extra activities? This might get me somewhere, although he will resent I am not paying him for the 50% of the mortgage so perhaps not.

however, he has a commercial property. I could claim a variation for unearned income (para 69). Does this income need to be included on his tax return? Likely he’s dodged that, or some of it.

what would you do?

The best thing to do is push for a court date to get a financial settlement so you can avoid all this !

Depends how he owns the commercial property. Directly, then yes that could be a variation. Indirectly through a limited company, potentially harder. However, if he is paying the whole mortgage you might still find he doesn't have to pay you anything.

Hobbies. You can negotiate but he can say no.

Without wanting to sound abrupt, in your situation you'll get a fair settlement on the equity in the house, release him from the mortgage and get CMS. That is what you need to do and if things aren't moving, file for a financial settlement through the court.

Commercial property is owned privately shared 50:50 with someone else. He’ll hate it if I do that. Also likely he’s not putting the income on his tax return .

This has been good to clear it up.

i am going to ask to be released from mediation if he hasn’t provided his info in full by the end of the week .

Is stbxh paying 100% of one mortgage and 50% of another for properties that will be viewed as joint assets? Is he in a massive financial mess and is there a real risk of him defaulting on both mortgages, so that both the family home and his other property end up repossessed? That would be my main concern at the moment, although I may have misunderstood.

Yes, yes and yes.

i don’t see what I can do about that though other than progress divorce proceedings?

Okay, if it is shared with someone else it could be complex. Also, you don't know how it has been let. It could have been sold on a 15 year lease with all the money up front; until you know you have nothing to report.

I know quite a bit about it but I think too complex to delve into.

So the conclusion is, I accept him not paying CM on the basis he is now paying 100% of the mortgage on the FMH.

There won’t be any unintended consequences further down the line of this decision? I won’t have contributed to the mortgage for some months. I will have paid 100% of bills, insurance, decorative upkeep, repairs if they arise.

Assuming all goes to plan, earliest we could have final order would be next May. So there’s a risk there in terms of financial behaviour etc.

is there anything I haven’t thought of, strategy-wise?