What did the Budget offer families stretched by family breakdown? Geraldine Morris reports
At the sharp end of family breakdown, family lawyers know only too well how making two households out of one stretches the finances of most families to the limit. As set out in more detail below, there’s some good news from last month’s budget, but for middle income families it’s largely bad news. The main knock-on effects for family lawyers trying to reach a workable settlement are:
- Higher tax for higher rate tax payers means less disposable income available for periodical payments and/or to pay basic household expenditure.
- Higher rates of capital gains tax (CGT) could impact on capital settlements where capital assets need to be sold to fund housing/lump sum payments.
- For bigger money cases, the news that entrepreneur’s relief is to be increased is good news, although unlikely to assist the average family.
- The freezing of child benefit for the next three years will impact most on the lowest income families.
- Changes to tax credits will benefit (slightly)
