The Child Support and Income Support (Amendment) Regulations 1995

Regulation 57

SCHEDULE 1E+W+S SCHEDULE TO BE INSERTED INTO THE MAINTENANCE ASSESSMENTS AND SPECIAL CASES REGULATIONS AS SCHEDULE 3A TO THOSE REGULATIONS

Regulations 9(1)(bb)

“SCHEDULE 3AE+W+S AMOUNT TO BE ALLOWED IN RESPECT OF TRANSFER OF PROPERTY

Interpretation

1.—(1) In this Schedule—

“property” means—

(a)a legal estate or an equitable interest in land; or

(b)a sum of money which is derived from or represents capital, whether in cash or in the form of a deposit with—

(i)the Bank of England;

(ii)an authorised institution or an exempted person within the meaning of the Banking Act 1987 M1;

(iii)a building society incorporated or deemed to be incorporated under the Building Societies Act 1986 M2;

(c)any business asset as defined in sub-paragraph (2) (whether in the form of money or an interest in land or otherwise);

(d)any policy of insurance which has been obtained and retained for the purpose of providing a capital sum to discharge a mortgage or charge secured upon an estate or interest in land which is also the subject of the transfer (in this schedule referred to as an endowment policy);

• “qualifying transfer” means a transfer of property—

  (a)

  which was made in pursuance of a court order made, or a written maintenance agreement executed, before 5th April 1993;

  (b)

  which was made between the absent parent and either the parent with care or a relevant child;

  (c)

  which was made at a time when the absent parent and the parent with care were living separate and apart;

  (d)

  the effect of which is that the parent with care or a relevant child is beneficially entitled (subject to any mortgage or charge) to the whole of the asset transferred; and return

  (e)

  which was not made expressly for the purpose only of compensating the parent with care for the loss of any right to apply for or receive periodical payments or a capital sum in respect of herself.

• “Compensating transfer” means a transfer of property which would be a qualifying transfer (disregarding the requirement of paragraph (e) of the definition of “qualifying transfer”) if it were made by the absent parent, but which is made by the parent with care in favour of the absent parent or a relevant child;

  “relevant date” means the date of the making of the court order or the execution of the written maintenance agreement in pursuance of which the qualifying transfer was made.

(2) For the purposes of sub-paragraph (1) “business asset” means an asset, whether in the form of money or an interest in land or otherwise which, prior to the date of transfer was use in the course of a trade or business carried on—

(a)by the absent parent as a sole trader;

(b)by the absent parent in partnership, whether with the parent with care or not;

(c)by a close company within the meaning of sections 414 and 415 of the Income and Corporation Taxes Act 1988 M3 in which the absent parent was a participator at the date of the transfer.

(3) Where the condition specified in regulation 10(a)

is satisfied this Schedule shall apply as if references—

(a)to the parent with care were references to the absent parent; and

(b)to the absent parent were references to the parent with care.

Evidence to be produced in connection with the allowance for transfers of property

2.—(1) Where the absent parent produces to the Secretary of State—

(a)contemporaneous evidence in writing of the making of a court order or of the execution of a written maintenance agreement, which requires the relevant person to make a qualifying transfer of property;

(b)evidence in writing and whether contemporaneous or not as to—

(i)the fact of the transfer;

(ii)the value of the property transferred at the relevant date;

(iii)the amount of any mortgage or charge outstanding at the relevant date,

an amount in respect of the relevant value of the transfer determined in accordance with the following provisions of this Schedule shall be allowed in calculating or estimating the exempt income of the absent parent.

(2) Whether the evidence specified in sub-paragraph (1) is not produced within a reasonable time after the Secretary of State has been notified of the wish of the absent parent that a child support officer consider the question, the officer shall determine the question on the basis that the relevant value of the transfer is nil.

Consideration of evidence produced by other parent

3.  Where an absent parent has notified the Secretary of State that he wishes a child support officer to consider whether an amount should be allowed in respect of the relevant value of a qualifying transfer, the Secretary of State shall give notice to the other parent that he proposes to refer the question to a child support officer for consideration and shall transmit to the child support officer any representations made by the other parent in considering the question.

Computation of qualifying value—business assets and land

4.—(1) Subject to paragraph 6, where the property which is the subject of the transfer by the absent parent is, or includes an estate or interest in land, or a business asset, the qualifying value of that estate, interest or asset shall be determined in accordance with the formula—

(2) For the purposes of sub-paragraph (1) the value of an estate or interest in land is to be determined upon the basis that the parent with care and any relevant child, if in occupation of the land, would quit on completion of the sale.

Computation of qualifying value—cash, deposits and endowment policies

5.  —Subject to paragraph 6, where the property which is the subject of the qualifying transfer is, or includes—

(i)a sum of money whether in cash or in the form of a deposit with the Bank of England, and authorised institution or exempted person within the meaning of the Banking Act 1987, or a building society incorporated or deemed to be incorporated under the Building societies Act 1986, derived from or representing capital; or

(ii)an endowment policy,

the amount of the qualifying value shall be determined by applying the formula—

Transfer wholly in lieu of periodical payments for relevant child

6.  Where the evidence produced in relation to a transfer to, or in respect of, a relevant child, shows expressly that the whole of that transfer was made exclusively in lieu of periodical payments in respect of that child—

(a)in a case to which paragraph 4 applies, for the formula given in that paragraph there shall be substituted the following—

and

(b)in a case to which paragraph 5 applies, the qualifying value shall be the value of the transfer.

Multiple transfers to related persons

7.—(1) Where there has been more than one qualifying transfer from the absent parent—

(a)to the same parent with care;

(b)to or for the benefit of the same relevant child;

(c)to or for the benefit of two or more relevant children with respect to all of whom the same persons are respectively the parent with care and the absent parent;

or any combination thereof, the relevant value by reference to which the allowance is to be calculated in accordance with paragraph 10 shall be the aggregate of the qualifying transfers calculated individually in accordance with the preceding paragraphs of this Schedule, less the value of any compensating transfer or where there has been more than one, the aggregate of the values of the compensating transfers so calculated.

(2) Except as provided by sub-paragraph (1), the values of transfers shall not be aggregated for the purposes of this Schedule.

Computation of the value of compensation transfers

8.  The value of a compensation transfer shall be determined in accordance with paragraph 4 to 7 above, but as if any reference in those paragraphs—

(a)to the absent parent were a reference to the parent with care;

(b)to the parent with care were a reference to the absent parent; and

(c)to a qualifying transfer were a reference to a compensating transfer.

Computation of relevant value of a qualifying transfer

9.  The relevant value of a qualifying transfer shall be calculated by deducting from the qualifying value of the qualifying transfer the qualifying value of any compensating transfer between the same persons as are parties to the qualifying transfer.

Amount to be allowed in respect of a qualifying transfer

10.  For the purposes of regulation 9(1)(bb), the amount to be allowed in the computation of E, or in the case where regulation 10(a) applies, F, shall be—

(a)where the relevant value calculated in accordance with paragraph 9 is less than £5,000, nil;

(b)where the relevant value calculated in accordance with paragraph 9 is at least £5,000, but less than £10,000, £20.00 per week;

(c)where the relevant value calculated in accordance with paragraph 9 is at least £10,000, but less than £25,000, £40.00 per week;

(d)where the relevant value calculated in accordance with paragraph 9 is not less than £25,000, £60.00 per week.

11.  This Schedule in its application to Scotland shall have effect as if—

(a)in paragraph 1 for the words “legal estate or equitable interest in land” there were substituted the words “ an interest in land within the meaning of section 2(6) of the Conveyancing and Feudal Reform (Scotland) Act 1970 M4 ”;

(b)in paragraph 4 the word “estate.” and the words “estate or” in each place where they respectively occur were omitted.”