Definition of Beneficial Interest and Avoidance

I'm subject to a variation order which is to be presented to a Tribunal. I am the Non Resident Parent.

The Variation concerns a property in my name that generates no income. I wish to put the property into Trust for my children and thus I will have no financial benefit. This would be in the long term best interests of my children and also remove the property as being an asset of mine. Would this be deemed Avoidance? I feel that because the property generates no income and any future capital gain will directly benefit my children, then there is no loss to them, only benefit. It would also not effect their day to day welfare if this property was not included in a Variation.

I understand that a Variation can be made if a property is of "Beneficial Interest". But, during the Divorce proceedings, the property was subject to a two year legal battle and eventually my Ex was awarded half it's value. Until that was agreed the property was of 'Beneficial Interest' to us both but neither of us had the 'ability to control' the asset. I would have put the property into a Trust as soon as we had separated but couldn't until the Settlement was agreed with all the other Trust arrangements (complicated Tax reasons).

Are Assets that are subject to a Court Summons/Divorce Proceedings deemed to be outwith your 'ability to control'? At the moment, half the Asset value is being added to my CSA income (although the property has made no income and fallen in value!).


Thanks in advance

Andy

not sure the total value of the property should be added to your income. My understanding is they (the CSA) give a value to any asset worth over £60K and take that value to be income. With interests rates as low as they are, I can't see this being much. Have you queried this?

There is no telling with the CSA. I can see where your ex is coming from and I would want the property included in your assessment as well. There is then the issue of your tax return - if that shows nil income from the property, they should be taking that into account, I think (but then there's the £60k issue?!)

As to whether it is deprivation of income - if the property is worth more than £60k then yes, I see it as such. It is not really relevant, in my eyes at least, that the children will benefit from it in the future. They may well need the income now (or they may not - but the CSA 'rules' can't deal with indidvdiual. circumstances). However, I'm no expert and what is often morally right is rarely right legally and then there's CSA 'right'....

That your ex was awarded half the value of the house is neither here nor there. CSA not intersted in who got what. Just what your income actually is.

Daft question - have you actually asked the CSA? I mean, not just Jo Bloggs who picks up the phone, but a manager or someone in the legal department?

Hi

Thanks for the reply.

Interests rates are set at net 8% by the Secretary of State (that would be 13% gross). Therefore, a £100k asset (even cash in a building society) is deemed to earn you after tax £8000. This is added to your annual net salary.

I agree with all you say, but my problem is if I put the property into a Trust, which is the sensible option re tax etc., then I relinquish all control of it. If the CSA subsequently demand I continue paying as if it is still my own Asset, then I cannot sell it and I'm stuck with paying for an Asset which is no longer mine and yields no income.

Re Yr - .. have you actually asked the CSA?
Yes, but no one will commit. They say that I must do what I think is right and declare it to them. If the land is in Trust then it technically is not my Asset. However, when my Ex appeals, only then will they address the issue and decide if it is Avoidance? By then I will not have the option of undoing the Trust.

Does anyone know of a Case related to this?