WF Tax Credit / Child Tax Credit .. Is an earmarked pension income?

LittleBill

Hi

I get WFTC & Child Tax Credit and have done for a number of years

In 2000 i divorced and as part of the divorce, an earmarking order was placed on my ex partners pension.

My partner has now retired and claimed his pension and have begun receiving earmarked payments from his pension

I'm self employed and do Self Assessment accounts.  The Tax Office have said that the pension I have received is not counted as my income as, it was never mine and is therefore not taxable : the scheme member is the one who pays tax

My query is, does anyone know if it is regarded as 'income' for the purpose of Tax Credits?

Does anyone have any experience of this?

MTIA

LittleBill

Alice_Holt

https://revenuebenefits.org.uk/tax-credits/guidance/how-do-tax-credits-work/what-is-income/pension-income/

Key is "Pension income for tax credits mirrors the tax treatment."

So if HMRC are sure it's not taxable - that should apply to TC.

But I'd write to TC give them info about your change of circumstances, tell them you have been told by HMRC it's non taxable, and ask for a written determination of its treatment for TC. 
Keep all paperwork.

LittleBill

Alice_Holt said:

https://revenuebenefits.org.uk/tax-credits/guidance/how-do-tax-credits-work/what-is-income/pension-income/

Key is "Pension income for tax credits mirrors the tax treatment."

So if HMRC are sure it's not taxable - that should apply to TC.

But I'd write to TC give them info about your change of circumstances, tell them you have been told by HMRC it's non taxable, and ask for a written determination of its treatment for TC. 
Keep all paperwork.

Thanks for your advice 

Both HMRC & the Pension scheme operator have stated it’s not my taxable income as it’s my ex’s income : I’m just allocated a part of it after he’s paid it 

TC shows in their advice that if I drew a lump sum from my OWN pension : it would not be considered income!  But there’s no advice on this specifically as I suppose it’s a grey area 

🤔

calcotti

LittleBill said:

TC shows in their advice that if I drew a lump sum from my OWN pension : it would not be considered income! 

I don’t that is correct. If you took a lump sum any tax free part of the lump sum would be ignored and any taxable part of the lump sum would be counted.

LittleBill

calcotti said:

LittleBill said:

TC shows in their advice that if I drew a lump sum from my OWN pension : it would not be considered income! 

I don’t that is correct. If you took a lump sum any tax free part of the lump sum would be ignored and any taxable part of the lump sum would be counted.

Apologies : didn’t clarify : I meant a tax-free lump sum