Taxable Income for Child Benefit

ender4

Hi, 

My salary has recently gone above £50k, so i'm paying more into my pension to take my Taxable Income to below £50,000.

But i've realised that Income for Child Benefit purposes includes dividends. So what do i count as Income for Child Benefit threshold purposes?

- I have some dividends paid from my Shares ISA. I assume they don't count for CB threshold purposes?
- I have some dividends paid in a normal investment account which uses up the £2,000 allowance. Does that count as income for CB purposes even if it's tax free?
- I have some dividends paid in a normal investment account that is above the £2,000 allowance. I assume i have to take that into account when lowering my taxable income?

So for example if i was on £52k PAYE after normal pension contributions, with £2k dividends paid in my ISA and £3k dividends paid outside my ISA, how much extra do i need to put into my pension to still get full child benefit?

Alice_Holt

My guess would be around £5k (gross including tax relief), i.e £3k net.

But given your question concerns tax, you may get more replies on the Tax forum.

https://forums.moneysavingexpert.com/categories/cutting-tax


This is the board for questions about benefits (including tax credits).

calcotti

https://www.gov.uk/guidance/adjusted-net-income

Dazed_and_C0nfused

ender4 said:

Hi, 

My salary has recently gone above £50k, so i'm paying more into my pension to take my Taxable Income to below £50,000.

But i've realised that Income for Child Benefit purposes includes dividends. So what do i count as Income for Child Benefit threshold purposes?

- I have some dividends paid from my Shares ISA. I assume they don't count for CB threshold purposes?
- I have some dividends paid in a normal investment account which uses up the £2,000 allowance. Does that count as income for CB purposes even if it's tax free?
- I have some dividends paid in a normal investment account that is above the £2,000 allowance. I assume i have to take that into account when lowering my taxable income?

So for example if i was on £52k PAYE after normal pension contributions, with £2k dividends paid in my ISA and £3k dividends paid outside my ISA, how much extra do i need to put into my pension to still get full child benefit?

There is no allowance for dividends, the first £2,000 is taxed at 0%.  And is part of your adjusted net income.

ISA's are tax free.

So the £3k would be part of your adjusted net income.