A father has been told he cannot get away with reducing his child support payments by deliberately reducing his income.
The issue arose when the father transferred 40% of the shares in his company to his second wife, which he meant he received 40% less dividend income. He said his child support payments should therefore be reduced to reflect his reduction in earnings.
The tribunal rejected his application after deciding there had been no genuine transfer of shares.
The father appealed but, although the Upper Tribunal accepted that the transfer was genuine, it did not accept that there should be a reduction in his payments.
It said the law required that parents should support their children and there were regulations in place to prevent parents from avoiding that liability.
In this case, it was necessary to consider whether the father’s diversion of income was purely voluntary or unavoidable, and whether it was carried out to reduce child support payments.
The tribunal found that the transfer of shares was entirely voluntary. The only reason advanced by the father for the share transfer was to pay his wife for her work in the business. However, there was no evidence that she had done any significant amount of work.
The tribunal was not impressed by the assertion that the wife worked 20 hours a week for the company when there was evidence that she was working five days a week for another organisation.
The father’s appeal was dismissed, and he was ordered to continue paying at the same level as before the share transfer.
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