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Clare
Clare, Family Solicitor
Category: Family Law
Satisfied Customers: 34698
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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What income would be used calculations if the payee

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What income would be used for CMS calculations if the payee now lives off tax free investment income, some considered capital drawdown. This capital used for investment was obtained from selling his business.
Hi
Thank you for your question.
My name is Clare
I will do my best to help you but I need some further information first.
Where do the funds actually come from
Clare
Customer: replied 2 years ago.
The ex-husband was self-employed during the divorce. The cash in the business accounts were the only business assets used for the asset split. I believe that he now has built his business to the point where he can sell it for a very large sum (estimated over £1 million), such that he can have a very good lifestyle living off the capital raised. His new "lifestyle income" could be mostly considered tax free and considered as form of capital drawdown.(Say, as with Investment Bonds etc.) Using the normal CMS calculation his income could be shown as very small.
Hi
i assume the assets will be invested and paying some for of interest
Clare
Clare and other Family Law Specialists are ready to help you
Customer: replied 2 years ago.
Claire,
Cannot wait on that number further today. Will be at that number from 10.00am tomorrow.
Thank you, John
I am sorry - the meeting had dragged on (and On) will tomorrow be acceptable or do you wish to give another number?
Customer: replied 2 years ago.
Clare, Sorry about the mis-spelling! Yes, tomorrow will be fine.
Customer: replied 2 years ago.
Clare,
I am looking for legal or understood definitions of the "total gross income" referred to in the divorce financial order "to allow for the calculation of periodical payments to the child - based on the application of the formula of the CMS."
What if he is living mainly off payments from investments that the taxman considers tax free because they are considered as withdrawing capital from the investments. eg:- Investment Bonds where the taxman allows for a tax free income from investment of 5% each year.
Hi JohnI am ready to call whenever you are!
I will try again later - I do not wish to leave a message when I call in case it is not appropriate - so do not worry about the missed calls - you are not being stalked!
Customer: replied 2 years ago.
Sorry, I have been out of my office. I am not certain that there is much to discuss. My daughter's solicitor suggests that there is not much that my daughter and her disabled son can do besides going to court. A typical income situation for the ex-husband could be a annual salary of £40,000 plus a capital drawdown income from his investments of £50,000 taxfee. Meaning that he lives the lifestyle of a PAYE payer on £110,000 gross, but declares £40,000 gross income for CMS calculations. The investment capital was from the sale of his business in which he was self employed.
I am available for the next hour or so in the office if you think you can suggest something different.(until 5-20)
Thank you Clare!
Hi John
My apologies I was out of the office myself.
Actually I would welcome the chance to discuss this - would tomorrow be possible
Clare
Customer: replied 2 years ago.
Clare
I am still available now if it is convenient
John
Customer: replied 2 years ago.
Thank you Clare. You have shown us that there are potential ways to overcome financial difficulties that we see ahead!
Your advice has helped considerably!!!
John
How do I pay for your very valuable advice?
Hi
You are most welcome - and you have already paid thank you
Clare