Rental income and child maintenance

[CatLandlady]

Short version: Should rental income be taken into account when calculating child maintenance payments please?

Long version and background: My ex-partner and I have a child maintenance agreement between ourselves, i.e. not via CMS. He will be working away for at least 18 months (UK based for 6 months, then overseas for 12 months) so has rented out his house for the period that he’ll be away. His job and therefore salary have changed, so we are in the process of re-negotiating the amount of child maintenance that he provides for our sons. However, we are disagreeing about whether his rental income should be included in the calculation. Does anyone have experience of this please?

For info, we use the gov.uk online calculator to work out the monthly amount.

The rental income (before expenses) is in the region of £1000/1200pcm so will make a significant difference to the monthly amount.

I have emailed Citizens Advice and a solicitor for advice but not received replies so I am turning to mumsnet!

Thank you.

Is he paying the correct amount for cm currently? Have you calculated it on the website?

Have you redone the calculation with his reduced nights as he will be abroad?

The house rental is an interesting question. I think it's out of order to include the whole amount but if you add up his total increase in income over the year minus his additional expenses you might get a fair amount.

I suppose it really depends on his past attitude. If he's a skinflint who refuses to pay a penny more then he needs to. If he's been paying exactly/less then CMS say to, then I don't blame you for asking for more especially considering you will be taking on more care.

If however he is a present dad who currently pays over the odds and you have a good co-parenting relationship then I wouldn't rock the boat.

The mortgage interest is deductable via the tax return. It's the bulk of the monthly payment in the early years. On those figures there is likely to be minimal profit as there will be other expenses like building insurance and any maintenance/repairs/renewals to deduct too. If you went through CMS any rental profit would not be considered until after the first tax return which in this case would be Jan 2027 for the 2025/6 tax year. Hardly worth pursuing imo for the ill feeling you're likely to cause.

@Cerialkiller

Is he paying the correct amount for cm currently? Have you calculated it on the website?
Have you redone the calculation with his reduced nights as he will be abroad?

Yes, we use the gov.uk to calculate the amount and that’s exactly what he pays.

The house rental is an interesting question. I think it's out of order to include the whole amount but if you add up his total increase in income over the year minus his additional expenses you might get a fair amount.

yes, I agree. and if we were able to have a reasonable discussion about it then I would hope that’s what the outcome would be. I just want feel like me and my sons are getting what we are entitled too, either legally (taxable income) or a more flexible calculation like you have described. Even if I’m not entitled to any of the house rental, then I would like to know for sure so I can forget about. I just feel like he’s quids in while I’m doing 100% of the childcare.

I suppose it really depends on his past attitude. If he's a skinflint who refuses to pay a penny more then he needs to. If he's been paying exactly/less then CMS say to, then I don't blame you for asking for more especially considering you will be taking on more care.
We haven’t gone through CMS but he pays exacting what the gov.uk online calculator says. I pay for all school trips, clubs/sports uniform, clothes etc

If however he is a present dad who currently pays over the odds and you have a good co-parenting relationship then I wouldn't rock the boat.
It’s so hard!!! I don’t want to rock the boat but it’s so annoying!!! He can opt out of childcare for 18months and be quids in while I’m here being a good girl not rocking the boat. It’s so unfair 😂😭😂

Im not going to rock the boat unless I can get some black and white facts…. But they’re proving hard to find!

@Seelybe ah, hadn’t realised the mortgage interest was weighted in that way. It will be extra complicated because he’ll be overseas too so won’t actually have to pay income tax during that time so how would we even calculate it? I was hoping a financial adviser/family lawyer might come on here and spell it out for me with all the calcs. But if that’s right what you say (and I do believe you), then it’s not probably not worth pursuing for the hassle.

Rental income is not fully his income though.
A proportion is for maintenance so not actual income.
You need to ask him jow much he gives himself and how much goes back in the 'business'

@Seelybe I haven’t got a mortgage so I don’t know how they work but no just asked a friend and he said that his mortgage statement shows that the repayment is about two thirds interest! Bloody hell!

Do you know what, I feel better already - the amount extra we’d get per month is not worth the agro. Thanks for that nugget of information x

The other question is, he's travelling overseas for work. Will his pay go up and would he admit to a pay rise if it does?

For someone who was quick to agree to pay privately and who pays that amount to the penny, are you sure that is his actual income? Without going via CMS you won't know unless he is showing you his pay slips.

Have you recalculated based on him doing zero nights with DC?

@Seelybe is right, it’s not worth it as you wouldn’t get a look in until the first tax return which reflects the change in 2027.

editted to add- and once you look at the interest, any amount you might be able to fight for wouldn’t be worth the hassle

Op I would go for whatever you are legally entitled to and if that means the rent then go for it. If I understand correctly, he's going to have no housing costs for 12 months while he works abroad and you pay for every single extra for your child and do full time childcare for18 months? If there's anyone who should be afraid of rocking the boat here it's him! And that goes double if he's working somewhere with low/ no tax regime! Don't be soft Op if he stays working abroad longer term the agreement you make now could hold for years and you don't want to regret it.

Especially as with an informal agreement you are trusting his pay is what he says it is.

He will get charged tax as if he doesn’t have a mortgage. So if he gets £1200 in rent and his mortgage is £1000 or whatever they will tax him as if he is making a £1200 profit minus the fees. That isn’t the case in any other business or way of making money.
I would work out how much he is actually taking home from renting out the house before including it in your calculation as I doubt he will make anything. Probably a loss due to the tax.
I personally don’t think you should be including it because it’s his home he is renting out. It’s a huge risk and could get trashed and he won’t be making much/ any money on it as it will go on the mortgage and tax.
Im normally pro parents paying over and above but I personally don’t think rental income should be included if there is a mortgage.
If you want it included then you are probably better off going to the cms than trying to negotiate.

Thanks for asking the questions, yes his pay will go up when he goes overseas and he won’t be liable for income tax either. But he has told me what his salary is now and what it will be when he goes overseas, and I believe him. He has also said that he’ll factor in the ‘no tax’ into the maintenance calculation too. So that’s all ok. It was just the rent income that we weren’t sure about. Thank you though x

I have two voices in my head @Dartypants and this is one of them 😂

But as it stands the moment (with other factors that I haven’t discussed on here) and based on what people have said about what the actual amount payable would be from the rent, then I’m not going to pursue it now. But if he decides to not return from overseas then I’ll pay more attention to the @Dartypants voice then!

Thank you 🙏 x

He will have to pay UK tax on rental income profits for UK property even if classed as non resident in the UK and not paying UK tax on earned income. Tax is either deducted and paid to HMRC at source through a letting agent or tenant, or the landlord can opt for self assessment as I described before.