Notional income variation

Also, aside from the fairness aspect, you probably want to look at what impact adding in notional income will have on your monthly payments and whether it is even worthwhile challenging things and looking at mortgage and solutions etc.. 

Thanks for your considered opinion.

I seem to recall simply stating to the mortgage provider that I had an adequate repayment vehicle in place to repay the interest only mortgage, so I don’t think there is any evidence explicitly linking my ISAs to repayment of the mortgage.

Also, the mortgage in question is on a property that I let out, and of course the profit on that is already accounted for in the CM calculation as unearned income. An aspect of that, unrelated to the discussion here about my ISAs, is that investment property mortgage interest costs are no longer an allowable deduction in determining taxable profit of the property - they are now taxed at my marginal rate and I then receive an income tax rebate equal to the basic rate of such costs. So the HMRC changes are designed to limit tax relief on such costs to the basic rate and I have no argument with that, however the CM calculation only looks at the gross taxable profit figure and I am now assessed for CM on an unearned income figure that is enhanced by the full value of such mortgage interest costs, despite the fact that I am not actually receiving any more income from the property. Anyway that is a distraction from the issue I am posting about. My point here is that I am already in a worse position CM-wise than before regarding the property that I let out, before any further detriment as a result of the ISAs repayment vehicle being subject to a notional income calculation.

What really p*sses me off however is that during our separation I offered to pay 50% of ALL actual costs in respect of our children rather than go the CMS route. We each earned similar salaries and we each had a similar level of profit from a property that we each let out, so frankly I can’t even think of a ‘fairer’ solution. Regardless of whether this was better or worse financially, I did this to try and play as full a role as possible as a father to my children post-separation. However my ex- declined this offer, and I can only assume this was because she had worked out that she would be better off going via CMS.

My son stays 50/50 with myself and his Mum. My daughter decided to live just with Mum.

This is what they wished to do. I would love to see more of both of them (especially my daughter) but I am not going to drive that just to reduce my CM amounts.

To Trusted Member,

Notional income will not be applied to your primary residence. 

Your ISA's will be producing some income so would not be considered as a non-generating asset even if the interest rate is poor.

Likewise, the properties you are letting out are also generating income.  So, they too will not be subject to notional income. 

I can't remember exactly where I have read it (some article by a UK Law firm), but if an asset is producing income, it is that income that will be used when calculating Child Maintenance and not the value of the asset.  Not possible, or fair, to make two different charges against the same asset.   

Notional income was a feature of the 2003 CSA scheme.  The same 8% was used, but the threshold was 65K. 

The 2012 CMS scheme scrapped Variations based on assets, but came under criticism from forums like Gingerbread and leading Judges such as Mostyn.

There was a case a few years ago (which Mostyn was Judge) whereby the father was asset rich (several properties with total value over 5 million), but income poor as his only regular income was his state pension of 113 per week.  Mostyn at the time called for the Variation based on assets to be re-introduced to cover examples like this.

I am not legal, but would say the notional income principle is aimed mostly at those who can live off capital and assets alone.  Like one poster said above someone who has a large capital sum deposits it in a zero interest account for the purpose of evading Child Maintenance.

Posted by: @mysterytrip

Your ISA's will be producing some income so would not be considered as a non-generating asset even if the interest rate is poor.

 

The ISAs I am being asked to provide more information on are what I have in place to repay the mortgage on my property that I let out (so not my primary residence) - though it has to be said that my choice to invest instead of repay the mortgage directly was a personal financial decision and there is no explicit link between the ISAs and the property itself, so no material evidence to link them. 

Your statement I quote above sounds like it could be a determining factor on whether the asset value itself is subject to a notional income calculation or not. However the individual ISAs are all where the underlying assets are stocks and shares. I am sure that these shareholdings will generate dividend income but this isn't paid out to me as income but rather serves to increase the value of the ISA holding (and is probably reinvested in more shares). So how to separate income from asset growth sounds (at least to my brain) rather tricky.

It is also true that the taxable profit I receive from my property is already incorporated in the CM calculation, so if I can convince the CMS that the ISAs are related to the property then your point about not making two different charges against the same asset comes in to play.

Apart from these points, the question of whether it is fair that my decision about how to repay my mortgage, a decision taken before I had even met my ex-, should have an impact on how much CM I am obliged to pay now, is in my opinion a very relevant point when the whole issue is considered from a discretionary point of view.

Thanks all for your inputs