HICBC Case Where Tax Payer Was Liable to Charge After Divorce

TC 08844.pdf (tribunals.gov.uk) Meades v’s HMRC 

I read a case just recently that went to appeal, and the taxpayer lost. It could have been avoided very easily. So, this blog is more to get you to think about the minute details, of who makes the child benefit claim, in addition to who actually receives the payments. 

The HICBC applies if a person’s (A) adjusted net income exceeds the £50,000 clawback threshold, and either they are entitled to child benefit in the relevant tax year, and they do not have a partner whose income exceeds their own; or another person (B) is entitled to child benefit, they are A’s partner, and A’s income exceeds B’s.

In this case the second condition could not be met, aa M and his ex-wife were not partners in that tax year, however, although M wasn’t receiving the payments, he was the one awarded with the child benefit claim and therefore the HICBC was valid. If the ex-wife had taken over the claim the second condition would not have been met.