A house I rent out at a loss? CSA enquiries.

Rouge_Diablo

I won't expound on 15 years of CSA aggravation, and another 5 years to come, but I would ask advice off anyone who may know some technical points about questions I am being asked in a new re-assessment.

I am being asked about a house I jointly own, and rent out. It is suggested that this is income, and as such, the CSA now want their slice. Firstly, if I pay my share of a mortgage and that does not get covered by the rent, is that still income, with no attention paid to the mortgage costs? (we tried to sell, with no luck, so thought we would rent in the hope the Housing market picked up over time). The CSA said previously over other matters they are not interested in Housing costs any more? I also pay 10% to a leasing company, is that taken into account? I own the property with an ex-partner (Not the Mother of my children). Her name is on the Deeds at the Land Registry, her name is on the mortgage, but I know she will not confirm any of this to the CSA, (she hates them with a passion for what they did to us when we were together), but the facts mentioned can be confirmed by me and those bodies concerned, so will that reduce my liabilities to half the rental I receive, which is of course the reality.
What checks do the CSA undertake? Bank Accounts, Mortgage holder, Land Registry?

I ask all these questions because of my contempt and deep resentment of the CSA over the years. I do not see my children, but have paid out of my wages for the 15 years I mention, and at times have paid £1000 a month. The mother of my children turned them against me a long time ago, after several Court cases that I thought had gone my way, and she regularly gets me reassessed. The CSA show no mercy, and as such, knowing the rules under which they act is so important. Never trust they will do the 'right' thing.

So any folk out there who know, or have had similar issues?

RAS

I assume that you return details of this rental to HMRC? How much "profit" do you pay tax on each year?

Crellow4

The 'income' after expenses is not taken into account for CSA purposes but the nett asset could be. Unless you are a self employed landlord in which case the income from the housing portfolio will be what your maintenance is based on.

Rouge_Diablo

Thanks for your response. We started receiving rent two months ago, so as of yet it has not been attached to any tax return.
I would love to produce figures for everyone to digest, and understand it all better, but as CSA staff will often check Forums, I would rather not make myself identifiable. As such, I was hoping someone could supply the principles/regulations/powers under which they work, so I can see what my situation is, and the best way of dealing with it?
For example, if they say, We are not checking with the Land Registry, we are not taking account of the co-owner unless she writes to us and supplies her financial details, we are not taking account of any Leasing company, I will be royally stuffed!!!
If they do take account of all these things, I will actively supply whatever details they want, let the Tax folk know, and get on with life. It's all new. I wonder whether I may just have a bad experience, and then decide to sell at a poor market price. The strange thing is, as far as I know, the CSA can't attack lump sums from Pensions and equity sales? It's all rather confusing, particularly, as I say before when you cannot trust the organisation to just do the right thing. As they so often tell you . they are just a Collection Agency.

Rouge_Diablo

Crellow4 wrote: »

The 'income' after expenses is not taken into account for CSA purposes but the nett asset could be. Unless you are a self employed landlord in which case the income from the housing portfolio will be what your maintenance is based on.

Again, thanks for that response. What do you mean by the 'net asset'? Is that the Equity in the house? Or part of the rent that I'm not understanding?
I'm not a self-employed Landlord. I'm a normal bloke, living on a pension, who has a house that after a relationship breakdown, we didn't sell. I'm not sure how that classifies me?

Crellow4

The equity in the house nett of any mortgage.

Crellow4

I'm not sure what you mean by 'they can't attack lump sums from pensions etc' - if you have assets exceeding £650000 the parent with care can apply for a Variation to include this in the calculation. Assets include houses you on live in, cash, shares etc so could include a lump sum from your pension.

Rouge_Diablo

Crellow4 wrote: »

The equity in the house nett of any mortgage.

Right. Is that the full equity, or any rise in equity since it started being rented?

Surely by deciding to rent, rather than sell, I haven't signed away 30% of my share of the equity to the CSA for maintenence? If anyone under the control of the CSA sells their house with equity involved, does that become 'income' and they ask for their share? I've never heard of that and you think you would hear the outcry from frustrated NRP's.

And if God forbid that's all true, what if I keep the house being rented beyond my CSA responsibilities (In my case about 5 years). Does a Sale after that date stop any CSA involvement?

As I thought, it's all rather confusing? More questions than answers?

Rouge_Diablo

Crellow4 wrote: »

I'm not sure what you mean by 'they can't attack lump sums from pensions etc' - if you have assets exceeding £650000 the parent with care can apply for a Variation to include this in the calculation. Assets include houses you on live in, cash, shares etc so could include a lump sum from your pension.

,

Again, I had never heard of that? I was talking of someone who retires and gets an annual pension of say £25k and a lump sum of £100k. I do know that the annual pension is liable for maintenance payments, but the lump sum isn't. I'm presuming if you are right that it is because it is under that £650k level?

Now in the case I speak of, I am very much under such levels. I would just want to protect say an equity of £50k if possible? Not much money, but a nest egg I would like to keep for myself if possible. Until maintenance is linked to contact, or they find some way of ensuring that the money is actually spent on your children, I do not offer more than I have to.

RAS

My recollection regarding capital sums is that no variation can be requested when the value is under £65K

Crellow4

Sorry, I typed too many zeros! The threshold for assets is £65k so the example of a £100k payout would potentially qualify as an asset for the purposes of a variation. Providing you can provide evidence that the equity in the house is less than £65k there shouldn't be a problem - unless of course you have additional assets which could be aggregated with the equity in the house?