[Solved] CSA + Renting

Rental income is classed as income by the CSA (and inland revenue) but if you have a mortgage, then the interest is deductible as far as the inland revenue is concerned, and I would argue with the CSA that the whole monthly mortgage should be deducted, which they may well agree with. If the equity is more than £65k, then they will also treat this as an asset that accumulates interest (I can't remember what the rate is, but I think it's unrealistically high.

Is there a good reason why you want to rent your property out instead of selling it when you are currently renting somewhere to live? If you sell the house and buy one to live in, then the equity doesn't count as far as the CSA are concerned, nor are you getting a rental income for them to use in their calculations.

Thank you for getting back to me actd.

I don't want to live in the house as it holds many bad memories plus it's not convenient location for work.

I called and spoke with the csa yesterday. The lady was not a asset variation specialist but she did her best to inform me of my options.

She told me weekly payments are capped at £1300 (with 1 child) and the interest on any assets over £65k is 8%. !!!

As I already knew she said if I move into the house I will have no additional income for rent and there would be no claim on the assets from the house.

If I rent it then the rental income will be added to my weekly salary. I will argue the case that mortgage should be deducted from this. She also said that the ex will also have entitlement to 8% of the equity in the house- which they divide into the year as a monthly sum. This feels like a lot and will take me to the capped amount for 1 child per month.

This is where I get confused- they told me if I decide to sell the house, buy myself a home to live in- that she'd be entitled to 8% of the equity. I do not understand the logic in this? Can you help to explain??

I also paid my ex a lump sum when she left which is more or less equal to the 8% if I were to sell. Therefore I'd have paid twice which I cannot afford.

Again, any help majorly appreciated.

This is where I get confused- they told me if I decide to sell the house, buy myself a home to live in- that she'd be entitled to 8% of the equity. I do not understand the logic in this? Can you help to explain??

That is something I haven't heard before. It might be worth speaking to the Citizens Advice Bureau to see if they have any knowledge about this, and also perhaps, ring the CSA again to ask them if they can point you to the legislation that specifies this.

hi actd

thanks again!

i may have confused things, and not have been clear with that!

to clarify, they are telling me that even if i were to sell now, she'd still have entitlement to 8% of my house I currently own, but wouldn't on the new house! But if I moved into it, then sold it, she wouldn't have a claim?!?!

its all so confusing and I did speak to the CAB today who said I should seek legal advice which I will do, as this sounds crazy!

I want to pay fairly, and if I was renting, then yes, I'd accept money coming in from that to be added to my income, but her having 8% of my assets seems a little tough. We were never married, and together for a couple of years. Yes I had a child with her, and I have provided for my child, but, as lots of dads say, the money never really goes to the child!

I asked the CSA if I were to save for 15 years, not go on holiday, not buy myself anything- and accumulated more than £65k would she be entitled to that- and they said yes! So, really, I may as well blow all my money, and not attempt to save for my daughters future, which has always been my plan?!?

Its just all sounds totally crazy to me- find me a bank that offers 8%!

The CSA didn't have a clear answer to this- is the money she's got 8% on over £65k or including £65 (eg. If I had £100k saved, would she be entitled to the whole 100 or just 35?)

Thanks again...

I had the feeling it was 8%, but I wasn't too sure - but I agree, you can't get 8% in any bank - just shows how crazy the rules are. I think (but I'd check when you get advice), it's only the money above the £65k that counts, so £35k on £100k equity.

One more thing to check when you get advice - find out what happens in a house exchange (assuming builders like Barratts etc still do this) where they buy your old house off you when you buy one of their new houses - it may mean change the equity to simply the difference in the house values - the reason I say this (and this goes back 20 years, so may well have changed) that I think when house exchanges were done, the stamp duty was calculated on the difference in value, not the whole value. Certainly worth checking out whether it gets around the maintenance liability on the equity.