Diversion of income

pendleton9651

New to the forum so be gentle please!

My ex husband and I have 2 children.  

We had a limited company together which he still has but now has his new partner as a director as well as himself.

He pays me minimal child maintenance as declares he only earns minimum wage while living a lavish life style. 

I want to ask the CSA for a variation of expenses on the basis of his partner taking the dividends from the company. Has anyone had any experience on this or can help.

Thanks 

MattMattMattUK

pendleton9651 said:

New to the forum so be gentle please!

My ex husband and I have 2 children.  

We had a limited company together which he still has but now has his new partner as a director as well as himself.

He pays me minimal child maintenance as declares he only earns minimum wage while living a lavish life style. 

I want to ask the CSA for a variation of expenses on the basis of his partner taking the dividends from the company. Has anyone had any experience on this or can help.

Thanks 

Is his partner taking dividends from the company? Being a director does not mean that they are a shareholder.
Have you looked on Companies House to see who the shareholders are?

tightauldgit

When you say 'we had a limited company together' were you a shareholder? Are you still a shareholder? 

As for the specific issue I think it's a tricky one so be interested to hear if others have more specific experience - if he had happened to meet a new partner who was wealthy and willing to finance his lifestyle who didn't work for his company then I think it would just be one of those things so there's an argument to be made that it's just how it is. 

If he is fiddling the books as you suggest I really don't know how CMS would look at it, but it occurs to me they might well be losing more in tax than he would be gaining in child support. 

tacpot12

Have you asked him to pay more? Have you asked his partner to support you with a request for more money? I doubt his new partner would be impressed if she realised that he was not supporting his children adequately. 

unforeseen

tightauldgit said:

When you say 'we had a limited company together' were you a shareholder? Are you still a shareholder? 

As for the specific issue I think it's a tricky one so be interested to hear if others have more specific experience - if he had happened to meet a new partner who was wealthy and willing to finance his lifestyle who didn't work for his company then I think it would just be one of those things so there's an argument to be made that it's just how it is. 

If he is fiddling the books as you suggest I really don't know how CMS would look at it, but it occurs to me they might well be losing more in tax than he would be gaining in child support. 

There's no fiddling the books from what appears to be written. Nothing wrong with not taking dividends. If partner's shareholding is enough to justify the dividends that they are receiving then that's all above board. 

tightauldgit

unforeseen said:

tightauldgit said:

When you say 'we had a limited company together' were you a shareholder? Are you still a shareholder? 

As for the specific issue I think it's a tricky one so be interested to hear if others have more specific experience - if he had happened to meet a new partner who was wealthy and willing to finance his lifestyle who didn't work for his company then I think it would just be one of those things so there's an argument to be made that it's just how it is. 

If he is fiddling the books as you suggest I really don't know how CMS would look at it, but it occurs to me they might well be losing more in tax than he would be gaining in child support. 

There's no fiddling the books from what appears to be written. Nothing wrong with not taking dividends. If partner's shareholding is enough to justify the dividends that they are receiving then that's all above board. 

Nothing illegal sure. But that doesn't stop it being a fiddle. This kind of trick to avoid CMS is pretty common. 

pendleton9651

Thank you everyone. I haven't said he is fiddling the books. I'm very much aware that it is all above board. 

My question was if she is taking the dividend and I ask the CMS to challenge it will the dividends taken by her be taken into account.

I would say this is also why they haven't got married as then the dividend would become "theirs" 

CurlySue2017

pendleton9651 said:

Thank you everyone. I haven't said he is fiddling the books. I'm very much aware that it is all above board. 

My question was if she is taking the dividend and I ask the CMS to challenge it will the dividends taken by her be taken into account.

I would say this is also why they haven't got married as then the dividend would become "theirs" 

I think the answer to your question is no

Only the income of the parent counts, not their partner

I could be wrong but that's how I understand it

tightauldgit

pendleton9651 said:

Thank you everyone. I haven't said he is fiddling the books. I'm very much aware that it is all above board. 

My question was if she is taking the dividend and I ask the CMS to challenge it will the dividends taken by her be taken into account.

I would say this is also why they haven't got married as then the dividend would become "theirs" 

No. And it wouldn't matter if they are married either. The CMS calculation is based on the declared income of the non-resident parent and no other individual. 

That's why I suggested earlier that the only route to get CMS to make any adjustment MIGHT be if you could show that the declared income was a paperwork exercise and that in reality monies from the business were flowing to your ex-partner in excess of what they were declaring. Even then I really don't know if CMS would act. 

You would have to go through the process with CMS and see what they say. CMS seem to be a law unto themselves most of the time.