Hi all
Quick question I am sure there will other dads in simlair suitation, unfortunately..
My end of year tax return is showing more than previous year due to filling for self assessment for rental income. BTL tax rules changed where all rent is counted as income., this has now left me with a problem, paying cms on the whole rent, which when you take off mortgage interest and other expenses is next to nothing. My accountant hasn't came across this problem and advised me he could supply me with my audited accounts to give to cms, which I think will make no difference to them and they will just go on the hmrc figure. I'd like to hear from anyone who finds them in this suitation,
Other option I have is to sell but that won't happen straight away.
Many thanks
I'm not expert in this, but I think this was one of the downsides when HMRC changed the rules to disallow mortgage interest to be offset against rental income. I suppose the question is whether you can afford the interest on the property without selling it, in which case, you could put the income into a pension which will then not be included in your CMS calculation, and you can cash the pension in later on when you are no longer liable for child maintenance. I would definitely get professional financial advice before doing this, and there may be other options available to you.
Spoke to my accountant, he's not came across this issue yet, had advised I submit my accounts to cms which I don't think they will entertain. I will end up selling up just can't be doing with the hassle.
If there is anyone here in a simlair problem or know of someone do let me know
Wish everyone here the best, head up guys and keep on fighting
If selling it leaves you with a fair amount of equity, then that will also be assessed by CMS I'm afraid, again, unless you put it into a pension to keep it out of the CMS calculation.
Whilst you can no longer claim interest payments as an expense, you can still claim other costs such as repairs and agent fees. I seem to remember that if the house was placed in the name of a limited company then interest could be claimed as an expense? However, you may be faced with capital gains tax?
I have posted about this issue in the following thread :-
I am appealing against this impact on Child Maintenance liability (hearing still to be heard), and I have also involved my PM (who says they cannot do anything until my appeal is heard, though they have written to the Secretary of State for Work and Pensions only to receive a sterile reply that doesn't actually address the issue being raised).
By the way - I actually did (as suggested here) make additional pension contributions to offset the increase in deemed 'income' due to this issue, and the FIU determined that I was unfairly diverting income in order to reduce my CM liability and applied a variation equivalent to my additional pension contributions. Also part of my appeal....