[Solved] child maintenance

I would say that it is - they will take into account anything that is taxable. You could put the profit into a pension, which might avoid this, but you'd need to take professional advice on such an investment, as I'm certainly not qualified in this respect.

Under the newest (2012) CMS scheme - "profit" from investments counts as "unearned income". Now that the CMS take their "income" figures DIRECT from HMRC, there is no point where you are asked to provide any information on your unearned income. Below, I assume you are a NRP and being asked to make monthly CM payments.

Here is some info:
https://www.citizensadvice.org.uk/relationships/children-and-young-people/child-maintenance/child-maintenance-2012-scheme/child-maintenance-calculation/the-2012-child-maintenance-scheme-calculating-maintenance-income/

There are 3 categories to consider - you should decide which you fall into.

1. You have substantial amounts of investments that generate substantial "unearned income" - i.e. you have X millions in "investments" and you draw a regular income from which you live.

2. You have some investments from which you derive "income". This is reported to HMRC on your tax return every year - and so CMS will already be aware of this information (although they do not use it automatically).

3. You have investments from which you derive "income" but these are "tax free" such as via an ISA or some other product. In this case you may not provide any details to HMRC - and CMS would not have this information.

Basically - no, unearned income is not taken into account automatically when working out what the NRP should pay in CM. This was part of the rationale to moving away from net and to gross income.

For unearned income to be taken into account - the "other parent" would have to apply for a variation - to ask CMS to take it into account. At this point, the CMS will either have the figure from a tax return via the HMRC - and will either allow (or not) the variation (this is most likely to happen to NRP in category 1).
CMS will look at the figure - and if it is material - and significantly changes the calculation - then they may use it. Although this is easily appealed by the NRP. When the RP asks for a variation, the burden of proof sits with them. They will be asked to prove that the NRP is living a life not in line with the income figure from HMRC. The CMS are trying to move away from such cases - and are quite unlikely to dedicate much time to "investigating" this issue (unless it is clearly material).

For those in category 3 - income from tax free products does not count as "income" for maintenance purposes.

hope helps

Thanks for that THL - looks like you are far more up to speed on this than I am 🙂

No worries.