CSA Variation – Value of Assets

KBee_3

I am subject to a variation appeal as a NRP on the grounds that I have assets worth over the threshold of £65,000.
One of those assets is a rental property worth around £750k which provides the bulk of my income. This is declared to the CSA and forms the basis of the assessment on which I am currently paying an acceptable £270 a month for one 12 year old son.
But the variation appeal seems likely to double-count this and also regard it as an asset on which I am assumed to derive an income amounting to 8%.
This would have the effect of increasing my theoretical (and assessable) monthly income by £5000!
Does anyone have experience of this type of double counting?
The relevant legislation says that any asset used in the course of trade or business should not be counted. Could a rental property be defined as a trade or business?
And does anyone have any thoughts on this figure of 8% that the legislation says should be the theoretical income from an asset? Anyone getting 8% from any asset currently would be doing very well!
I’ll probably have to appeal against the CSA’s variation decision. Any advice on how the appeal system works?

Light_Speed_Cruiser

I'm not an expert in CSA internal machinery because I've always had lawyers do it.

I understood broadly speaking CS1 has a maximum charge of 30% on your net income and CS2 is 20%.

I am not sure how owning a property is construed as income because landlords have overheads and liabilities. I think the CSA is treating the property as a capital gain and wants to charge you for it. The problem is this gain is not available until the sale of the property.

There are CS1 experts on this forum who can probe deeper into the specifics but you are right, 8% is unrealistic for current market conditions. It's also fair to say s.69 of the County Courts Act still gives 8% on CCJ’s, an excellent deal for plaintiffs.

The appeal system starts with an application to the appeals section within the CSA, just phone and ask for an appeal form. If you are not satisfied or cannot get an appeal then make an application to the Tribunal Service http://www.tribunals.gov.uk/, if the CSA has breached an Act of Parliament or can be shown to have lied in some way to cause you a financial loss you can go to the Administrative Court.

You can also go to the Parliamentary Ombudsman http://www.ombudsman.org.uk/ and the Independent Case Examiner (ICE) http://www.ind-case-exam.org.uk/ but I have no experience of these. Others here might be able to comment.

I’m told NACSA is excellent for the £40 donation – it delivers the goods and can puppy-walk you through the process.

If you need help on legislation, then check your home insurance policy for legal cover. Google around for Durham Legal Services and Stephen Lawson and phone them, both are child support experts.

kelloggs36

I would assume (without seeing any details) that if AFTER all costs taken into account ie mortgage and all running costs, that the net value is in excess of 65k then this is what she is after - the 8% of the amount your assets are worth over the 65k.

LittleJohn

Hi

My ex has recently raised an appeal claining that I had assets over 65k (rental property). She lost the appeal as I showed accounts going back over three years and my tax returns show that the Inland Revenue see the portfolio as a business. The accounts deduct all expenses etc. The rental income was then used as part of a new assessment rather than the +65k.

The slight problem is that she has appealed against the assessment and I now have a Tribunal to look forward too. Hopefully they will see it the same way ...

LJ

pd001

Light_Speed_Cruiser wrote: »

I’m told NACSA is excellent for the £40 donation – it delivers the goods and can puppy-walk you through the process.

If you need help on legislation, then check your home insurance policy for legal cover. Google around for Durham Legal Services and Stephen Lawson and phone them, both are child support experts.

Also, have a look at Child Support Solutions based in Birmingham.
Google them and then weigh up all the specialists, and then see who comes top for your personal circumstances.

Cozworth806

From what you say it depends if you have the rental income from the asset included in your self employment SA schedule rather than your land and property SA?
The CSA only look at the income quoted as self employment rather than all the various parts.
If that is the case then as you mentioned the CSA will have included that figure to work out your calculation and there is no double counting allowed. This will have been profit net of expenses, mortgage interest etc, with tax tax and NI deducted.
An asset which produces income which is included in the calc is precluded from the variation.

You would need to make them aware that the income from that property has already been included and so should not be considered within the variation. Variation regs 18(3d)

If the value of the assets are looked at then they can be considered, but only after mortgage value. There is no consideration for expenses etc. What income you derive from them is not looked at.

KBee_3

LittleJohn wrote: »

Hi

My ex has recently raised an appeal claining that I had assets over 65k (rental property). She lost the appeal as I showed accounts going back over three years and my tax returns show that the Inland Revenue see the portfolio as a business. The accounts deduct all expenses etc. The rental income was then used as part of a new assessment rather than the +65k.

The slight problem is that she has appealed against the assessment and I now have a Tribunal to look forward too. Hopefully they will see it the same way ...

LJ

Hi LJ
Thanks for your post and good luck with the Tribunal.
Did you get advice for your successful initial appeal? If so from whom and how good did you find them?

Thanks.

KBee_3

Cozworth806 wrote: »

From what you say it depends if you have the rental income from the asset included in your self employment SA schedule rather than your land and property SA?
The CSA only look at the income quoted as self employment rather than all the various parts.
If that is the case then as you mentioned the CSA will have included that figure to work out your calculation and there is no double counting allowed. This will have been profit net of expenses, mortgage interest etc, with tax tax and NI deducted.
An asset which produces income which is included in the calc is precluded from the variation.

You would need to make them aware that the income from that property has already been included and so should not be considered within the variation. Variation regs 18(3d)

If the value of the assets are looked at then they can be considered, but only after mortgage value. There is no consideration for expenses etc. What income you derive from them is not looked at.

Thanks for that.

The CSA have now accepted my argument about double counting .... but are discounting the rental income rather than the asset value!

So I'm going to be hit for an assumed 8% return on the capital value - even though I can demonstrate (by the rental income accounts) that it is nothing like 8%.

Am I alone in thinking this is Mickey Mouse-land?

Any suggestions as to how I might proceed? My accounts don't include the rental income in my self employed business, but the rental income is almost double the amount I earn from self employment.

Found_true_love

OK has anyone got the CSA rule booklet that we can read and make sense of rather than slightly different interpretations that are interpreted differently!

The reason I am interestead is that my ex is doing the same thing

I would like to read the "CSA RULES"

LittleJohn

KBee wrote: »

Hi LJ
Thanks for your post and good luck with the Tribunal.
Did you get advice for your successful initial appeal? If so from whom and how good did you find them?
Thanks.

Hi KBee

I used the NACSA, you cannot go wrong for £40... I also did some research for myself on sites like this.

LJ