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Will I owe more CM ...
 
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[Solved] Will I owe more CM if I sell my business

 
(@Dan592)
Active Member Registered

Fully divorced 7 years ago - paid my dues every month .

Only one 18 yr old left paying for after 4 of them --She didn't get enough gcse's to get her into sixth form so her mother enrolled her into a rubbish 3 year media course finishing July 2019 when she is 19.5 yrs old

I have had a offer out of the blue to buy an arm of my business - if I accept, this should possibly go through in December 2018 - I will get entrepreneur tax relief on the sum exchanged . Clearly its going to be a reasonable end sum - not enough to retire on but helpful in everyway when I wasn't trying to sell.

Anyone know what effect this will have on the CM which is due to finish July 2019 ? Any way a lump sum can be claimed ? or on 1st April am I likely to have a reassessment lawyers letter on my desk .

We just have a voluntary agreement in place fixed by the lawyers several years ago and informally increment rises agreed as the years have gone by .. No CSA or formal body involvement.

If anyone can shed any light (legal ) or assumptive on how teh worst and best case scenario that I may face, I'd be very grateful.

Dan

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Topic starter Posted : 03/05/2018 12:46 am
(@dadmod4)
Illustrious Member

I would say that if the maintenance was worked out by the court, then that's what it stays at, unless there is any provision in there for a recalculation due to extra money coming in. HOWEVER, if she finds out about this, then she has the option to open a case with CMS - the maintenance they calculate will override the court order as it's over 12 months old, and an assets over a certain sum (I think it's about £60k, but I'm not sure about this) will be assessed on the basis that it can be invested to provide an income - CSA used to work on a return of 8%, but I'm not sure what CMS use.

One option might be to invest the whole lot into a pension - that would put it out of the calculation for the time beingm and you can then withdraw from age 55 and gain all of the tax benefits that pensions provide. HOWEVER, again, I am not expert in this, so you would need to get professional financial advice on investing this, and I would also get professional legal advice to make sure that whaty I have said above is correct, and that you can't get caught out on this.

ReplyQuote
Posted : 03/05/2018 1:49 am
(@Child Maintenance Consultant)
Noble Member Registered

Hello Dan

Under child support legislation, regular child maintenance payments must be made until a child is 16 years old, or 20 if they are in full-time, non-advanced education (A-level or equivalent), or for as long as Child Benefit is being paid. When a child leaves full-time education in the summer, Child Benefit generally continues until the first week of September, therefore, you may be required to continue paying maintenance until this time.

You have indicated that you did originally have an arrangement via the courts in the form of a Consent Order in England and Wales and Minute of Agreement in Scotland. As there are usually costs involved in this type of agreement they are usually done at the same time as parents are going to court for other things such as divorce or a division of assets. However, it does sound like you have both been managing your agreement amicably over time.

Many parents do now choose to come to an amicable agreement and this is known as a family-based arrangement. Although family-based arrangements are not legally binding, they are very flexible and can be easily changed.

Generally, child maintenance is calculated using only the gross income of the paying parent, minus any pension contributions. As it sounds like you now have an amicable agreement in place, you could try and negotiate with your children's mother when your agreement should come to an end and whether the sale of your business could be included into your calculations.

As you did originally have a court agreement, if your children's mother did want to change or enforce this to include any extra income that you may have, it would mean seeking legal advice. This usually results in going back to court to set out the application on a standard form and then the court will then consider any changes.

Any Consent Orders that were endorsed after March 2003 are not legally subject to change unless they have been in place for at least 12 months. After 12 months, either parent can apply to the Child Maintenance Service and the Consent Order will no longer be valid. However, if a Consent Order dates back to before April 2003, then law does not allow parents to change over to the Child Maintenance Service. Only the courts can arrange child maintenance in such circumstances.

Child Maintenance Options can help you with further information about your options and for a more personalise service, you may wish to visit the Child Maintenance Options website yourself at http://www.cmoptions.org.

You may also be interested to know the Department for Work and Pensions (DWP) have a website, 'Sorting out Separation'. It aims to make it much easier for separating and separated parents (and childless couples) to find the support they need, when and where they need it, and encourages them to collaborate on a range of issues. The link is http://www.sortingoutseparation.org.uk/

Regards

William

ReplyQuote
Posted : 03/05/2018 3:28 pm
(@Dan592)
Active Member Registered

Thank you .. That is more or less hat I had read. I appreciate your input and suggestions

ReplyQuote
Topic starter Posted : 06/05/2018 1:50 am
(@Dan592)
Active Member Registered

Thank you William
I appreciate your advice

ReplyQuote
Topic starter Posted : 06/05/2018 1:51 am
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