Me and my partner who were cohabitating have now seperated.
I bought a BTL property which generates a gross annual income of £18,000.
This does have an interest only mortgage and I do plan to pay CMS from it.
The issue is I am looking to move abroad so the main part of the CMS paid is from my job. I will not really be working abroad and will live on natural mean ie no electricity, living off organic food growing my own crops etc.
So I won't really have any income to pay towards CMS, however the property I own which is currently on a BTL arrangement is my own fallback for when I do come back hope to have something to oive in for myself.
Now as for CMS i understand I can pay from the rent of the property but that would be a significant reduction of what I am paying now from my salary.
Would or could I be forces to sell that property as a result?
Ideally I wouldn't want to as this is all I really have for myself and won't have anything else to fall on upon return and I am happy to pay my share of CMS from it. Just rather not sell the property as I will not be able to buy another one and will not have anywhere to live if I do sell it out.
On the other the CMS that I pay from that income wouldnt account to half of what I pay in wages.
The statutory requirement is to pay the CMS relative to your income up to a certainly level (~150K a year).
So if income comes down, so do payments - this is expected.
The CMS get their data as to income from HMRC and what they have on you in terms of your income. There is no obligation to report the rental income separately. You do have to report it in a self assessment return (and this way you'd be able to benefit from whatever tax relief you get on that income), and that's how it will show up to the CMS.
There are provisions for the courts to order payments in the case of sufficiently wealthy individuals where income is sourced from their wealth (e.g. growth of investments). The onus here would be on the receiving parent to advance such a case, either as a variation or a court case. The likelihood of this succeeding is small. I wouldn't think a property, worth approximately 350K, would in anyway fall under that mantra.
I would get professional financial advice on changing your mortgage to capital repayment - I think part of the tax benefit of tax relief on the interest has reduced anyway, and it means your income from the rental will be reduced (so will reduce your maintenance liability) while giving you a longer term investment that is debt free.