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Ask Clare Your Own Question
Clare
Clare, Family Solicitor
Category: Family Law
Satisfied Customers: 34121
Experience:  I have been a solicitor in High Street Practise since 1985 and have specialised in Family Law for the last 10 years
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The courts and Tribunal Service judge gave the ruling that

Resolved Question:

The courts and Tribunal Service judge gave the ruling that the cash gifts I received from my parents as a help as I was overdrawn and had card debts is to be considered an income as a result, it was ruled that I pay my wife for my 2 sons 20% of this additional income as a non resident parent. I would like to find out if the cash gifts are to be treated as an income as I was under the impression that the income on which children need to be paid is from earned income. I should be most grateful if you could tell me if the gift is to be treated as income.
Submitted: 1 year ago.
Category: Family Law
Expert:  Clare replied 1 year ago.
HiThank you for your questionMy name is ***** ***** do my best to help you but I need some further information firstHow were the gifts paid?
Customer: replied 1 year ago.
Transfer into my bank account .
Expert:  Clare replied 1 year ago.
Sorry - I meant how much and how often!
Customer: replied 1 year ago.
£43500 spread over 3 years in the years 2009, 2010 and 2011. My parents had decided to help me out as I had run large legal bills and accountancy bills as a result of costly divorce proceedings. My ex wife appealed against the decision of the CSA ( who had rejected her appeal) on not declaring my income, diversion of funds to my father who was a partner in my medical practice and lifestyle inconsistent with my income. The judge rejected the first two allegations due to my ex wife and her advisor producing insufficient evidence. On the third accusation and on the judge's direction, my parents gave a written statement of regular transfer of various variable amounts to my account that enabled me to clear all my credit card debts and bank overdrawn accounts. This amounted to altogether £43500 over 3 years. My lifestyle was the issue due to my hobbies of taking part in parachuting. I have one motorbike and lived in rented accommodation. I took up additional job of territorial army Major earning only few thousand pounds all income declared to HMRC. My main income being self employed GP(medical practitioner). I have 2 sons from this marriage, I have not married since divorce in in 2010. No other children. I apologise for so much detail.
Expert:  Clare replied 1 year ago.
How much did you and your father respectively earn for the same job?
Customer: replied 1 year ago.

Sorry about the delay in responding. My share of the practice income was 65% and my father received 35%. He worked part-time and had his own pension.

Sitting beside the judge was an accounts expert who checked all the accounts submitted and advised the judge.

My father owned the premises and charged the rent for equipped and furnished accommodation. Accounts were prepared by chartered accountant. I had to submit evidence of the open market rent of the premises. rent charged was on an annual increase basis. The rent charged in 2013 was 19000. Income in Year 2011. D Pall ( myself ) 62088, my father had 61126 including rent. Year 2012: D Pall 43865, J Pall 47403,Year 2013 D Pall 39815, J Pall 43746. All these figures were accepted by the CSA and also the court. I do hope I have explained well and in detail. To summarise, The rent was deducted from my income and added the same amount to my father's income.

Customer: replied 1 year ago.
£43500 spread over 3 years in the years 2009, 2010 and 2011. My parents had decided to help me out as I had run large legal bills and accountancy bills as a result of costly divorce proceedings. My ex wife appealed against the decision of the CSA ( who had rejected her appeal) on not declaring my income, diversion of funds to my father who was a partner in my medical practice and lifestyle inconsistent with my income. The judge rejected the first two allegations due to my ex wife and her advisor producing insufficient evidence. On the third accusation and on the judge's direction, my parents gave a written statement of regular transfer of various variable amounts to my account that enabled me to clear all my credit card debts and bank overdrawn accounts. This amounted to altogether £43500 over 3 years. My lifestyle was the issue due to my hobbies of taking part in parachuting. I have one motorbike and lived in rented accommodation. I took up additional job of territorial army Major earning only few thousand pounds all income declared to HMRC. My main income being self employed GP(medical practitioner). I have 2 sons from this marriage, I have not married since divorce in in 2010. No other children. I apologise for so much detail.
Expert:  Clare replied 1 year ago.
May I ask why your income fell so drastically
Customer: replied 1 year ago.
The fall in income in the year 2012 and 2013 could be explained for rent adjustment in my father's favour and also general fall in income due to fall in income due to reduction in the number of patients on the practice's list. Please do remember these figures were prepared by the chartered accountant, went through the inland revenue and further scrutinised by the specialist accountant advising the judge.
I still need the answer to my question of the parents cash gift considered as my income that I intend to appeal against. I have checked the CSA information on their booklet and on their website. Income mentioned is from work, state benefits, pension, investment and property. I have income only from my practice and Army.
Expert:  Clare replied 1 year ago.
The points that you make regarding the Accountant and the HMRC are not relevant to the issue I am afraidWithout seeing all the paperwork the best that I can do is make an "educated guess' however it seems clear that the Tribunal based the decision on the lifestyle ground on the basis that whilst they believed that in fact you were diverting income on the basis that it would be gifted back they could not prove it.The relevant legislation is herehttp://www.legislation.gov.uk/uksi/2001/155/schedule/madeand of course cash gifts are not referred to and would generally be ignored - it is the extent and regularity of the gifts - linked with the financial relationship between you - that has caused the problem.If instead they had gifted you your Parachute sessions; or a new car or something similar then it would be beyond the remit of the CSA - but since it was Cash the CSA can simply make a variation that reflects the paymentsHowever the fact that this clearly is a decision base don "we cant prove it but" it is very appealable - but in the mean time make sure any future support is gifts in kind not cashPlease ask if you need further details
Customer: replied 1 year ago.
I f I supply you the required paper work and ask you to prepare the appeal, how much would be the cost?
Expert:  Clare replied 1 year ago.
Hi
I am afraid that that is outside of the limited remit of this site.
However once you have sent that letter and the two weeks have passed I woudl be happy to look at the applictaion that you prepare - but you MUST send that letter first - and the longer you wait the more the property goes up in value
Clare
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