Tax credits

drc

If tax credits are not means tested, does that mean that someone who has several kids but also has millions in the bank or invested can claim them as long as they have no "income" (i.e. don't work and not getting any interest off their savings and investments)?

According to the Turn2Us calculator, they get the full amount :eek:. Either the calculator is wrong, or the system is !!!!ed up.

No wonder the country is broke.

StevieJ

drc wrote: »

If tax credits are not means tested, does that mean that someone who has several kids but also has millions in the bank or invested can claim them as long as they have no "income" (i.e. don't work and not getting any interest off their savings and investments)?

According to the Turn2Us calculator, they get the full amount :eek:. Either the calculator is wrong, or the system is !!!!ed up.

No wonder the country is broke.

Why would you have millions invested and receive no income what about dividends/interest?

JWF

What if you had millions of quids worth of gold stashed under your bed?

StevieJ

JWF wrote: »

What if you had millions of quids worth of gold stashed under your bed?

I was going to suggest that but didn't want to encourage her BTW a hell of a sized bed that.

drc

StevieJ wrote: »

Why would you have millions invested and receive no income what about dividends/interest?

Sorry, I am being theoretical. I just meant if you were a really bad investor and were not making any interest on your savings (or very little) then you can still get tax credits, even if you have millions in capital.

Obviously this is unlikely to happen but it's just weird that all the other benefits reduce if you have savings over a certain amount but not with tax credits.

PasturesNew

Glad to see others, like me, have absolutely NO idea how it works as it's all shrouded in mystery, confusion and bizarre (non-working) online calculators.

I looked once at WTC - it assumed some ridiculously high rate of return on my savings (£800/week I think it said, when £8 is more like it).

97trophy

drc wrote: »

Sorry, I am being theoretical. I just meant if you were a really bad investor and were not making any interest on your savings (or very little) then you can still get tax credits, even if you have millions in capital.

There are two requirement for Tax credits (1) income below certain level and (2) minimum number of hours worked per week (30 I think).

Assets are not part of the equation.

There was a recent example of a millionaire estate agent who was receiving tax credits. Despite have plenty in the bank as savings he was claiming a low salary and thus legally entitled to benefits.

PasturesNew

97trophy wrote: »

There are two requirement for Tax credits (1) income below certain level and (2) minimum number of hours worked per week (30 I think).

Assets are not part of the equation.

There was a recent example of a millionaire estate agent who was receiving tax credits. Despite have plenty in the bank as savings he was claiming a low salary and thus legally entitled to benefits.

Must be tax credits for kids then - Working Tax Credits take assumed interest income as income to add to any low (or zero) income you earn.

downshifter98

Child tax credits (introduced in 2003) were purely based on income so if you were someone who had just opted out of the full-time rat race (perhaps only working part-time instead) and had much of your assets in ISAs (the income from which doesn't count re child tax credits) so that your declared family income was around £15,000 per annum (with drawdowns from savings to top this amount up - this also doesn't count re tax credits) then, for the last 8 years you would have received full child tax credits (this would also avail you of a full warmfront grant and free dentistry and prescriptions) then, upon your child reaching 16 (and still receiving the tax credits) they would have received £30 per week EMA whilst at sixth form/college and then, if they were to go to university (and with your family income still at or below £25,000) the tax credits would stop but instead the 'child' would receive fairly sizeable non repayable grants to help them financially - I would imagine that anyone who quite accidentally found themselves under this new system (in 2003 - thanks to Gordon Brown) would be feeling not only a little smug by now but also flabbergasted that such a system was put in place in the first place. Or you could have just not claimed any of this 'free' money, of course.

downshifter98

System

PasturesNew wrote: »

Must be tax credits for kids then - Working Tax Credits take assumed interest income as income to add to any low (or zero) income you earn.

Not according to http://www.hmrc.gov.uk/leaflets/wtc2.pdf

silvercar

downshifter98 wrote: »

Child tax credits (introduced in 2003) were purely based on income so if you were someone who had just opted out of the full-time rat race (perhaps only working part-time instead) and had much of your assets in ISAs (the income from which doesn't count re child tax credits) so that your declared family income was around £15,000 per annum (with drawdowns from savings to top this amount up - this also doesn't count re tax credits) then, for the last 8 years you would have received full child tax credits (this would also avail you of a full warmfront grant and free dentistry and prescriptions) then, upon your child reaching 16 (and still receiving the tax credits) they would have received £30 per week EMA whilst at sixth form/college and then, if they were to go to university (and with your family income still at or below £25,000) the tax credits would stop but instead the 'child' would receive fairly sizeable non repayable grants to help them financially - I would imagine that anyone who quite accidentally found themselves under this new system (in 2003 - thanks to Gordon Brown) would be feeling not only a little smug by now but also flabbergasted that such a system was put in place in the first place. Or you could have just not claimed any of this 'free' money, of course.

downshifter98

Applied to a lot of retired. The reward for having your children late in life - retiring early.