Tim Palmer examines the fiscal impact of the high-income child benefit charge on parents who receive child benefit.
An income tax charge could apply to a taxpayer who is entitled to child benefit (or has a partner who is entitled to child benefit). You have to look at the income of each partner separately. The child benefit is taxed on the partner with the highest income.
The scenarios could be as follows:
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Both husband and wife individually each have income of less than £50,000. Neither will be taxed on the child benefit.
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The wife has income of £20,000 and the husband has income of £75,000. The husband will be taxed on the child benefit. The tax will be the amount of the child benefit itself.
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The wife’s income is £58,918 and the husband’s income is
