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Hiding income when determining CS/Self-employed

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  • Hiding income when determining CS/Self-employed

    I came across this case today which shows how a judge calculated income when one party is keeping money in company.

    Also goes on about calculating section 7 expenses in this situation.

  • #2
    Thank you Arabian!


    • #3
      At first glance, it appears the Judge got it right but that may not be the case. The key question is how the holdco is funded. It mentions the holdco has a profit of 17,593 but also mentions the holdco pays 3,200 per month in principal and interest and receives 1,200 per month from the father. How is there a profit from that? More than likely the holdco is funded by dividends from Sybro. If that's the case, the Judge has double counted income. Imputing the before tax profit of Sybro and the before tax profit of holdco double counts the dividends transferred from Sybro to holdco. I'd need to see the holdco's financial statement to see how it is profitable. But more than likely, father is getting screwed.


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