How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Clare Your Own Question
Clare
Clare, Family Solicitor
Category: Family Law
Satisfied Customers: 34105
Experience:  I have been a solicitor in High Street Practise since 1985 and have specialised in Family Law for the last 10 years
13262538
Type Your Family Law Question Here...
Clare is online now

What income would be used calculations if the payee

Customer Question

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.
Submitted: 1 year ago.
Category: Family Law
Expert:  Clare replied 1 year ago.
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 1 year 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.
Expert:  Clare replied 1 year ago.
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 1 year ago.
Claire,
Cannot wait on that number further today. Will be at that number from 10.00am tomorrow.
Thank you, John
Expert:  Clare replied 1 year ago.
I am sorry - the meeting had dragged on (and On) will tomorrow be acceptable or do you wish to give another number?
Customer: replied 1 year ago.
Clare, Sorry about the mis-spelling! Yes, tomorrow will be fine.
Customer: replied 1 year 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.
Expert:  Clare replied 1 year ago.
Hi JohnI am ready to call whenever you are!
Expert:  Clare replied 1 year ago.
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 1 year 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!
Expert:  Clare replied 1 year ago.
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 1 year ago.
Clare
I am still available now if it is convenient
John
Customer: replied 1 year 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?
Expert:  Clare replied 1 year ago.
Hi
You are most welcome - and you have already paid thank you
Clare

Related Family Law Questions