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Posted Wed, 25 Oct 2023 07:27:15 GMT by Sue Nicola
Apologies if my questions are naive - I am struggling! I am about to get a tax free lump sum of 25% of my Civil Service penion pot. I also have young children so I am trying to ascertain my continuing eligibility for Child Benefit and also Tax Free Childcare/30 hours free childcare once I get the lump sum. Taking Child Benefit first, I believe that my 25% tax free lump sum is NOT taken into account for 'adjusted net income'. Is this correct? Of course my new monthly pension income together with earnings likely WILL take me over the 50k level, but I think the tax free lump sum is NOT in that equation. Now, moving to eligibility for Tax Free Childcare/30 hours - the ceiling there is 100k. I don't believe I will get anywhere near that - but my logic is predicated on the 25% tax free lump sum NOT being in the equation. Again, am I correct?
Posted Wed, 01 Nov 2023 08:57:25 GMT by HMRC Admin 25 Response
Hi Sue Nicola,
For the Higher Income Child Benefit Charge if the lump sum is non taxable then not included for the adjusted net income.
This would also be the case for tax free child care as long as the payment is non taxable. 
Thank you. 

 

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