Is a payor entitled to capital gains from the sale of his business?

[92] In Fung v. Lin Justice Perkins considered the situation of a payor who had enjoyed two huge capital gains resulting from the sale of his business, followed by a year of much more modest income as he set up his new company. Justice Perkins noted that the payor had chosen not to attempt to generate any investment income from his capital, and that he was drawing on that capital to finance his lifestyle. Justice Perkins asked “Why is it unfair?” to take these capital gains into account when determining the payor’s income for support purposes. He found that it was appropriate to include those capital gains in income, using a 3-year average.