Inheritance Tax Changes

According to statistics, more than 1 million people in England, Scotland and Wales, who are eligible for working or child tax credits, don’t currently claim their entitlement.

Tax credits have received some bad press over the past few years, with some households having to pay back significant sums of overpaid credits. Largely, this is due to fluctuating incomes within households, as current years’ claims are paid based on the previous year’s income. When the current year income is finalised, the claim must be adjusted up or down accordingly. With careful management, these overpayments can generally be avoided.

Broadly, you will be entitled to claim some form of tax credits if you fall into one of the following groups:

  1. You are a parent/parents and your household income is up to £47,000 per annum (or up to £73,000 if you are paying for childcare).
  2. You are a couple who are both working with household income of under £18,000 per annum, even without children.
  3. You are single with no children and are working earning under £13,000 per annum.

Tax Credits



Tax credits will soon be superseded by the new universal credit system. This is being rolled out in phases and is already in place for single, unemployed new claimants. The new system should be fully implemented for all claimants by June 2018.

If you are already claiming tax credits when the universal system comes in to force, and your claim under universal credits would result in a lower payment, transitional protections are in place to ensure you continue to receive the higher tax credit amount until you have a change of circumstances. If you are claiming tax credits and would receive a higher amount under the universal credits system you will be able to move to the new higher payment straight away. Provided you make a claim as soon as possible, this is a win win situation and everyone who thinks they are eligible should check now.

For those with fluctuating incomes year on year, making a protective claim is also important to ensure you do not miss out on credits when you have a year with particularly low income. This could be particularly relevant to farmers, for example, in the current market.

If you are unsure whether you are entitled to make a claim, or how to make a claim, please get in touch.

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