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Capital gains and CMS Payments
#1
Afternoon, all.

I'm new to this.

I've been paying child maintenance to my ex for the past five years; the first three through a court order and latterly through the CMS system.

After my ex and I separated; I paid her the amount that was agreed from the proceeds of the sale of the family home and I bought a family home for myself and the children and also a flat to rent out to a friend who was in need. Those circumstances have now changed and I'm now thinking of selling the flat which will result in a capital gain. Does anyone know if the capital gain that I make on the sale of the flat will be factored into any future payments that I make to my ex? The annual CMS review is in February 2017.

Any thoughts?
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#2
(10-20-2016, 03:03 PM)Mark Yeadon Wrote: Afternoon, all.

I'm new to this.

I've been paying child maintenance to my ex for the past five years; the first three through a court order and latterly through the CMS system.

After my ex and I separated; I paid her the amount that was agreed from the proceeds of the sale of the family home and I bought a family home for myself and the children and also a flat to rent out to a friend who was in need. Those circumstances have now changed and I'm now thinking of selling the flat which will result in a capital gain. Does anyone know if the capital gain that I make on the sale of the flat will be factored into any future payments that I make to my ex? The annual CMS review is in February 2017.

Any thoughts?

Child Support is based on P60 (if only Employed/On Benefits) and on Self Assessment if you have any Self Employment or other income that needs to be considered for Tax.

You need to get expert advice on this, but my take on it is
You used your own money to fund this purchase.
Rental income would of been a taxable income (minus your costs).
Selling it is only the same as selling a car for example, so not taxable.
Posts made by me are my opinion and any factual information should be checked out. If you do not have a Solicitor, often your local CAB can get you some initial advice.
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#3
Thanks for that. I think I will take professional advice because I will have to declare the capital gain on my self-assessment form to which the CMS have access when assessing how much I pay. It would seem inequitable that I have to hand over a share of any proceeds from the sale because I paid and funded the flat from my own money/loans after the divorce settlement. However; nothing would surprise me with the way that this system seems to be loaded in favour of the recipient.
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#4
(10-21-2016, 12:59 PM)Mark Yeadon Wrote: Thanks for that. I think I will take professional advice because I will have to declare the capital gain on my self-assessment form to which the CMS have access when assessing how much I pay. It would seem inequitable that I have to hand over a share of any proceeds from the sale because I paid and funded the flat from my own money/loans after the divorce settlement. However; nothing would surprise me with the way that this system seems to be loaded in favour of the recipient.
If its a Taxable amount, then you need to report is straight away, if it puts your income up by 25% from last tax year.

However, in April 2017, you can then contact them again, as you will be declaring a drop of over 25% in the 2017/8 tax year, what will create an immediate reduction.
Posts made by me are my opinion and any factual information should be checked out. If you do not have a Solicitor, often your local CAB can get you some initial advice.
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