As an accountant and well versed in tax accounting, I feel I am qualified to answer this post. This is a classic case of what I have complained about for years. Lawyers and Judges do not understand financial implications and therefore give bad advice to the public. Your first post clearly demonstrates that your lawyer and you do not understand it. Here is the relevant quote "We both believe that all I need to indemnify her from is the tax that is owed ONLY on the lump sum amount. In other words, take her average overall tax rate and multiply the lump sum payment by the tax rate and I have the tax amount owing...which is considerably less."
That is not the way our tax system works...
Lets take an example. I don't have my tax spreadsheets with me so the figures I give you are approximate
On a 100,000 income, an average tax rate is about 25%. However the marginal tax rate (the amount of tax you pay on every additional dollar of income) would be about 40%. This is because of our progressive tax system. You act like you are paying a flat tax. Without being disrespectful, it sounds like none of the 5 of you (you, your lawyer, her, her lawyer and above all the Judge) did not understand the tax implications. Based on the wording of the clause, the additional tax payable should be calculated on her marginal tax rate not the average tax rate. Your last post is what you should do.
Just pay it and be done with it. It will cost you more in legal fees than its worth and there is a good chance you could lose.
Accountant.
That is not the way our tax system works...
Lets take an example. I don't have my tax spreadsheets with me so the figures I give you are approximate
On a 100,000 income, an average tax rate is about 25%. However the marginal tax rate (the amount of tax you pay on every additional dollar of income) would be about 40%. This is because of our progressive tax system. You act like you are paying a flat tax. Without being disrespectful, it sounds like none of the 5 of you (you, your lawyer, her, her lawyer and above all the Judge) did not understand the tax implications. Based on the wording of the clause, the additional tax payable should be calculated on her marginal tax rate not the average tax rate. Your last post is what you should do.
Just pay it and be done with it. It will cost you more in legal fees than its worth and there is a good chance you could lose.
Accountant.
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