Commentary

E2.232 Tax credits—artificial reduction of income

Personal and employment tax

E2.232 Tax credits—artificial reduction of income

E2.232 Tax credits—artificial reduction of income

Claimants depriving themselves of income in order to secure entitlement

If a claimant has deprived themselves of income for the purpose of securing entitlement to, or increasing the amount of, a tax credit, they are treated as having that income1.

HMRC guidance states:

'Deprivation occurs if a claimant gives up, or transfers to another person, an income which was received, or due to be received, to gain or increase entitlement to tax credits. For example, a claimant may, by a deed of gift, transfer entitlement to an occupational pension to someone else … The claimant may

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