Our articles are written by experts in their field and include barristers, solicitors, judges, mediators, academics and professionals from a range of related disciplines. Family Law provides a platform for debate for all the important topics, from divorce and care proceedings to transparency and access to justice. If you would like to contribute please email editor@familylaw.co.uk.
A day in the life Of...
Read on

What is the Difference Between Income and Capital?

Date:5 FEB 2010

MAX LEWIS 29 Bedford Row Chambers

What is the difference between income and capital? This sounds like a simple question. Our instinctive reactions revolve around income as the periodic receipt of smaller sums and capital as 'once and for all' larger sums whose role is to provide security interest or both. This will do for most purposes. However lawyers accountants and the courts have all struggled to find a clear definitional dividing line. The best the accountants have been able to achieve is broadly to define 'capital expenditure' as that applied towards the 'acquisition improvement or disposal of capital assets'. Circularity is of little help. Hire-purchase payments are a very good example of expenditure which cannot easily be categorised as income or capital. It is well known that dividends drawn from companies have caused the Child Support Agency (CSA) much confusion for many years for substantially the same reason. Lord Denning MR captured neatly the difficulty that problems of categorisation are really problems of definition.

To read the rest of this article see December [2009] Family Law journal.

To log...

Read the full article here.