Child Maintenance and Capital Gains Tax

yapp3410 · 25 January 2019 at 10:35AM

Hi all - any semi-authorative advice on this problem would be most helpful:

Basically - will my ex-wife receive any money when I get a windfall from selling shares in my employers company?

1. I currently earn £30000, but my child maintenance payments are based on my 2017-2018 salary of over £40000! Due to me receiving a one-off bonus of £1250 in Dec 2018, CMS have stated that my actual salary is £31250 and does not trigger their crazy 25% variance rule!

2. So I am resolved to be overpaying child maintenance for the forseeable future - and the sum will not be correct unless I recieve an immediate £10508 payrise!

3. However, my current employer has issued key workers with actual shares in the company. These share do will not provide dividends, and are currently valueless.

4. The company is expected to be valued and sold for >£100million in the next couple of years, at which time all share issues must be sold - meaning I will hopefully receive a windfall of over £100000.

5. My question is - as the sale of these shares will be subject to Capital Gains Tax - will they be treated as Income by the CMS or will they not even know about them through annual reviews? I simply DO NOT WANT my ex-wife receiving a huge payout for doing nothing - the system has screwed me over constantly and none of the money paid to her will be seen by my son.

Any advice on this complicated subject would be amazing - thanks!

Comms69 · 25 January 2019 at 10:42AM

You know this would all have been avoided if you'd just paid maintenance voluntarily...

Is your ex-wife not raising your child(ren)? - hardly doing 'nothing'

yapp3410 · 25 January 2019 at 10:57AM

Excuse me - I have actually been voluntarily overpaying child maintenance to my ex wife for the past 9 years - she has already been paid maintenance for the start of this new claim period, and I can not even ask them to take that extra payment into account.

pmduk · 25 January 2019 at 10:59AM

yapp3410 wrote: »

I simply DO NOT WANT my ex-wife receiving a huge payout for doing nothing

Any money is to be used for child support. Children are very expensive to raise.

Comms69 · 25 January 2019 at 10:59AM

yapp3410 wrote: »

Excuse me - I have actually been voluntarily overpaying child maintenance to my ex wife for the past 9 years - she has already been paid maintenance for the start of this new claim period, and I can not even ask them to take that extra payment into account.

Why would the CMS be involved if you pay voluntarily.

yapp3410 · 25 January 2019 at 11:03AM

I know they are - thats why I have been overpaying child maintenance for 9 years, to the tune of thousands of pounds.

I was still overpaying on the very day I got the letter from the CMS - I was more than happy for them to come up with an official calculation to stop any ambiguity - however, there policy of assessing Gross Weekly Income is a joke at best, and if you search this forum you will find many people being legally forced to overpay with no course for redress.

yapp3410 · 25 January 2019 at 11:06AM

I left the Armed Forces in Aug last year and was lucky enough to find a new job nearer my son - however, my new salary was over £10000 less than my army pay.

My ex-wfie was given transparent notice of this and I told her I would have to reduce my maintenance payments - but was still overpaying from Aug 18 to Jan 19.

Simply - she went to the CMS in order to get an official calculation as is her right.

tacpot12 · 25 January 2019 at 11:07AM

As they will be subject to Capital Gains Tax and not Income Tax, they will not be seen as income by CMS but as capital. CMS use HRMC's records of your income, so if unless the 'bonus' appears on your pay slip, HMRC and CMS won't see it as Income.

There are things that your ex-wife can do to try to have your CMS payment increased, but there is no guarantee of success for her as previous rules on capital assets have been changed.

Given that she is looking after your children some of the time, I would suggest that you invest a proportion of your windfall in income-producing shares and pay your Ex-Wife the income "for the benefit of the children". I would suggest that the proportion that you invest should be roughly the same as the proportion of the time that the children spend with her. Once your children at 18, you can divert the income to support them thorough university if they are going, and once they have no need of parental support, you can spend the capital on yourself or them. Investing in the right assets should see the capital value of the assets increase as well as producing a useful income. You can adjust the proportion to reflect the degree to which you feel you are overpaying.

yapp3410 · 25 January 2019 at 11:09AM

Thank you for that reply - most helpful. Of course I will seek full financial advice nearer the time.

daddydodo · 30 January 2019 at 4:37PM

Increase your pension payments then you'll cross over the magic 25% threshold and qualify for a CMS reassessment

DennisTenus · 25 July 2019 at 10:18AM

There are things that your ex-wife can do to try to have your CMS payment increased, but there is no guarantee of success

What things?

Child Maintenance and Capital Gains Tax

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