Child Maintenance on significant monetary holdings.
Haven't been able find anything of substance related to my issue. I've made a significant amount of money after selling cryptocurrency last year. It's all legal and capital gains tax was paid. I'm curious if this will be considered touchable even though I'll soon be unemployed as I have no need to work. I've not had communication with PWC or my daughter for multiple years due to vicious false accusations and other unforgivable behaviour and saw it best to just walk away, despite how close to the edge it pushed me.
The money I have is mostly used to pay bill and continue living, though it's a significant amount I don't intend to go back to the workforce and just retire at a young age. When my daughter is old enough I intend to sit her down and explain everything to her, that she was always loved and me leaving was absolutely not her fault, despite what her mother has most likely convinced her. I don't want PWC to live it up on my dime when I could put a large sum away for her to ensure she is the one who benefits from my investment.
Edit: I am not earning interest, so it wouldn't be considered a form of income.
there is a possibility of bitcoin being used in a CMS calculation. but I think that would only work if your ex is aware of it, and she requests CMS for a variation:
Receiving parents and paying parents can apply for an Asset Variation. Asset Variations that can be considered are:
- if the paying parent has assets worth more than £31,250
- any money whether in cash or deposited
- gold, silver or platinum bullion bars and coins
- any virtual money (for example, bitcoin) which is capable of being exchanged for money
- stocks (can also be known as equities), shares and unit trusts
- gilt-edged securities (a bond issued by a government or company as a means of borrowing money)
- land rights
- chose in action (a property right or the right to possession of something that can only be obtained or enforced through legal action)
also CMS are currently in process of making changes, where they will be asking any trading and investment firms to give them information if a paying parent has used their platforms, and they will include this information when they calculate maintenance at annual review time.
if it gets to that stage, then they likely will take 8% of the value of asset and add that to maintenance calculation:
There was no clear consensus on the percentage rate we should use to derive a notional income or minimum value. We therefore opted to proceed with the 8% rate proposed in line with the Judgment Debts (rate of interest) Order 1993, and we will set the minimum value of £31,250.
I wonder if there will be an upper limit to that then? Surely they'd still have to take into account I wouldn't be working and would be dependent, long term on what funds I did have? Somehow I don't think they'd really care from what I've seen so far.
As I understand it, CM is generally by default based only on your income which as you say would be zero. However the PWC can apply for an asset variation whereby you can be assessed for CM on your assets. Also known as a 'notional income' variation. At the moment I believe this happens only if the PWC requests such a variation, at which point the CMS will ask you for details of your assets, however Bill337 seems to suggest that changes may be afoot for the CMS to gather asset information themselves so not sure how this process will change.
Have a look at chapter 34 in the variations document here :- https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1066233/volume-3-variations.pdf
Also a couple of other useful links :-
Chapter 5.2 here :- https://researchbriefings.files.parliament.uk/documents/CBP-7773/CBP-7773.pdf
Basically, certain types of asset (as defined in the above links) can be assessed if they exceed £31,250 in value. If they do, 'notional income' is calculated at 8% of the asset value and this is added to your other assessable income and CM calculated thereon. Incidentally, I understand that the threshold value of £31,250 was chosen because 8% of this = £2,500, which is the same threshold for other types of unearned income to be included in the assessment (such as property income for example).
Each individual asset has to exceed the £31,250 threshold, so if you had £30k in an ISA and another £30k in a bank account, then neither qualifies and no notional income is calculated on these two assets.
It is far from water-tight and fair in some cases - in my case I have a property that I let out and which I have a mortgage on. Rather than pay down the mortgage directly I chose to have an interest only mortgage and invested money elsewhere in an ISA over time to accumulate and pay down the mortgage capital that way. Unfortunatelty I was assessed for CM on the notional income calculation on that ISA money, despite my explanation of what that money was for and pointing out that had I simply chosen a repayment mortgage instead of an interest-only mortgage then these funds wouldn't even have existed. This notional income was assessed for CM in addition to the income I received from letting the property out !