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Clare, Family Solicitor
Category: Family Law
Satisfied Customers: 34886
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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My husband earns around £100K per annum as a software specialist.

Customer Question

My husband earns around £100K per annum as a software specialist. He is paid through his company which which he owns solely and his salary is the only payment made into the Company. He has very little expense as he either works at their offices or our home office.
As we have agreed to divorce he is advising me that he only earns £25K per annum which his company pays him and that is the same as me. Therefore he is not liable to pay me maintenance even though we have been married for 12 years and have two children aged 8 and 11, We have calculated our total assets are around £300K in property and savings.
Is my husband correct in that he can hide his earnings in this way, after all he owns the company and as a sole Director and employee he can decide what to pay himself?
Submitted: 3 years ago.
Category: Family Law
Expert:  Clare replied 3 years ago.
Thank you for your question.
My name is Clare and I will do my best to help you
No he cannot hide his income in this way.
So far as Child Maintenance is concerned the Dividends he receives will form part of the assessment - although you may have to appeal the frst assessment.
So far as Spouse maintenance is concerned the Family Court will simply go ahead on the basis of the income he previously had
Please ask if you need further details
Customer: replied 3 years ago.

Hi thanks very much for that. I know that he will continue to take a minimum salary and not pay himself dividends if he can avoid. Regardless of what he pays himself in salary and dividends he is still paid £100K per annum. Will that be fully taken into account or just the salary and dividents he decides to take out of his company? Note he is the only Director and Employee with minimal overhead.



Expert:  Clare replied 3 years ago.
Both the family court and the CMS can deal with that effectively
Customer: replied 3 years ago.

Thanks Clare

Sorry a little confused, so effectively are you saying that the courts will take his full income i.e. the £100K and not just what he pays himself in dividends and salary?

Expert:  Clare replied 3 years ago.
If he actually receives that amount and this is the amount that he paid himself in the past then yes the Court will assume that this is what he will receive in the future
Customer: replied 3 years ago.
Sorry, I still don't have my head around this. He pays himself approx 35k a year. The rest goes into the company. Would child maintenance and spousal allowance be calculated on the 35k or the full amount ie what he pays himself and what he puts into the company? Thank you for your help.
Customer: replied 3 years ago.
Relist: Incomplete answer.
Expert:  Clare replied 3 years ago.
Both the CMS and the Family Court have the Power to look at all the income available to your ex - whether he keeps it in the company or takes it out as wages and dividends
The CMS may not take account of it in the first assessment - but if you appeal and inform them of the situation they will then do so.
The Family Court will have all the information available to them and can make the order accordingly
Please ask if you have further details