26 Feb 2015

A question about : Best option,need advice

Hi,

Me & my partner are in the process of splitting up we have a 10 year old daughter.
I have my own Ltd co and my ex is the secretary, she takes a dividend only from the Ltd co as she also works part time about 16hrs per week as a self employed hair dresser.
I bought a house recently and although i offered to move out and let her stay there she is set on moving out back into a council house.
Now we need to come to some sort of agreement on me providing money to support my daughter. I have told her i have no probs continuing paying her the dividend out of the business which is on average Ј800 - Ј1000 per month but i need to know if this will be to her benefit or not.
As she will be going back to council accom, and she only works part time she will need to register for benefits, tax credits etc i need to know if she receives a dividend from the Ltd co will this be seen as earnings and therefore reduce any benefit entitlement that she would receive. If so what are the other options, if i bought back her shares then gave her cash direct for raising our daughter will this go against any benefit entitlement if so can i then pay money into an account in my daughters name that she will have access to?
Any advice would be greatly appreciated.

Thanks

Best answers:

  • I think that would be classed as income and therefore would affect CTC, WTC, HB and CTB.
    You sound like you're being extremely reasonable so congratulations on that as not all are.
    I think i'm right in saying that maintenance is not included in these assessments so it would probably make more sense financially to buy back her shares and pay her the money as maintenance.
  • Can i ask why would she need to register for benefits if she is in receipt of a dividend of that amount and 16 hours part time work...???
    Personally i think many will find it offensive that you even ask if this is right or will it affect her claim...!
  • I read it as registering for CTC/WTC rather than other benefits.
    I think the OP is being much more reasonable and mindful of his child's welfare than many NRPs.
  • Its good that the nrp to be is thinking ahead for the pwc but she may not be considered as a priority need for a council house if they know he has two houses- she may be thought of a making herself intentionally homeless if he has offered her to live in one with their daughter and she declines. Just a thought !
  • Does she do any work in return for the dividend? Did she invest in the company?
    You both seem financially secure therefore it is not clear why she needs council accommodation and benefits.
  • hmmm, deprivation of income comes to mind....
    i she plans on claiming Income Support etc... it really could go against her...
    plus... it seems rediculous to me that she would want to accept the proposal...
    800 income, PLUS 15% of your income... or 90 quid a week and 15% o your income...
    BTW: I work full time house and barely come out with 800 quid... i would say continue as it is, then pay her a fair amount of maintenance...
    - what about when the kids are grown up ... what will she live on then...
    it seems like its an amicable split... but ...
    consider if she goes to the csa... its 15% of your income... (thats an extra 120 assesment if you buy back her shares....)
    it could well be in your best interest to stick as it is, then pay maintenance on top (bear in mind: legally its only 15% of your TAXABLE INCOME minus tax and NIC;s
  • thanks for replies although there seems to be some just posters jumping to or making up their own conclusions.
    In order: kevin137:
    She would potentially be receiving the dividend as my contribution to my daughters upkeep, not for her OWN income i only questioned whether this would affect any benefit claim as i do not intend to pay her a dividend & child support on top of it, the money she will receive from me will be to raise my child and cover costs associated with it.
    Also how much she earns in 16hrs varies greatly from one week to the next as she is a hairdresser and not paid by the hour but by how busy she happens to be on those days and beleive me sometimes it barely covers her chair rent and fuel so she is just as entitled to claim benefits as any one else.
    Cally Smart
    I only wish i had two houses, if i have to move out i will be going back to my parents, we just left a council house to buy the property we are in at the moment, since we have a daughter i thought it only right that she stay there so as to cause the least disruption to her.
    michelle2008
    She is registered as the company secretary but does not play an active role in the running of the company and she bought the shares when i started the company in 2007, she has 20% and i have 80%
    Altough we are not financially secure by any means, we have money coming in but we still have debts like most people.
  • maybe should also have mentioned that we are not married, but have been together 12 years
  • basically all i want to do is provide for my daughter, as the money i give my ex is for her to raise my child obviously i do not want it to affect my partners right to income support, tax credits or whatever which neither of us has claimed for years btw
  • You say you have no problems continuing to pay her the dividend - but if she owns 20% of you company is she not entitled to this?
    Surely this could and should not be classed as child support - it is simply a return on her investment (unless you are bumping it up considerably?).
    Sorry if I have misunderstood - but she should have her dividend income, her income from her work plus child support from you? It seems crazy that she would need income support. Even if you bought back the shares given the size of the dividend they must be worth a considerable amount?
  • i meant pay her the dividend as child support if it was to her benefit.
    I cant afford both so if worst comes to worst i would have to wrap up the company if she did not sell me back her shares. Then what?
  • i have also agreed to settle all her debts so she has little or no outgoings
  • Sorry,didnt mean to jump to conclusions,I thought you bought the house after you decided to split to live in yourself.I sincerely hope you dont have to use the CSA and can come to an agreeable conclusion with the pwc.I am a nrpp Just as well to record anything you do financially/legally as things can get quickly out of hand !
    All the best, Cally
  • I am sorry I still don't understand why you think the dividend is child support? Is she legally entitled to it? If this equates to 20% share then your company must be doing well.
    If she is legally entitles to the dividend then a court would force you to pay child support on top?
    Again I may be missing something here as it doesn't seem to add up.
  • I doubt if your ex would be able to claim income support, as this is restricted to lone parents with a child under five, carers, and a small number of other groups. Your ex is working and your child is 10, so IS is unlikely. Depending on earnings, she might be able to claim JSA, or she might want to consider increasing her hours.
Категория: