This is particularly relevant for separated or divorced parents trying to understand who can claim Child Benefit and whether it can be shared or transferred.
This article highlights the key issues and sets out practical guidance based on the current legal and tax position.
Does this apply to you?
You may need to review your position if you have a child who qualifies for Child Benefit, have separated from the child’s other parent, and either you, your former partner, or a new partner earns over £60,000. In these circumstances, the High-Income Child Benefit Charge may apply and affect how much of the benefit is ultimately retained.
This is often part of a wider question about what benefits can be claimed after separation or divorce, particularly where financial arrangements are changing.
Understanding the basics
Only one person can claim Child Benefit for a child at any time, and legal responsibility rests with the named claimant. The benefit can, however, be paid into any bank account, meaning the claimant does not need to receive the payments personally. It is therefore common for one parent to make the claim while payments are made to the other.
In most cases, the claim should be made by the person responsible for the child’s day-to-day care, usually the parent the child lives with most of the time.
In most cases, Child Benefit should be claimed by the person responsible for the child’s day-to-day care. This is often referred to as the “main carer” and is usually the parent the child lives with most of the time.
What changes after separation?
Child Benefit arrangements do not automatically update after separation. This can lead to unintended consequences, particularly where historic arrangements no longer reflect the child’s living situation.
Where the original claim remains unchanged, the initial claimant continues to be legally responsible, even if the child now lives with the other parent or payments are made into a different account. This can result in unexpected tax exposure.
It is not uncommon for disputes to arise in practice, particularly where one parent feels that “my ex-partner is trying to claim my Child Benefit”, or where long-standing arrangements have simply never been revisited.
If a child lives primarily with one parent following separation, that parent is usually treated as the main carer and should make the claim. If the other parent continues to claim, HMRC should be notified and a new claim may be required.
In shared care arrangements, parents are expected to agree who will claim. In practice, the parent with greater day-to-day care will usually claim. In a true equal care arrangement, either parent may claim, but only one claim can exist at any time. If agreement cannot be reached, HMRC will make a determination.
Separation should always trigger a review of who is the named claimant.
The High-Income Child Benefit Charge
The High Income Child Benefit Charge remains one of the most significant risks following separation.
The charge applies where an individual has adjusted net income over £60,000. The charge increases gradually, at a rate of 1% of the Child Benefit received for every £200 of income above £60,000, and removes Child Benefit entirely at £80,000. Importantly, the charge applies to the named claimant, or their current partner, not necessarily the person receiving the payments.
Whilst a couple, if either you or your partner earns over £60,000, any Child Benefit received may be partially or fully recovered through the High-Income Child Benefit Charge. A “partner” for these purposes means someone you are not permanently separated from, who you are married to, in a civil partnership with, or living with as if you were.
Following separation, a former partner’s income is no longer relevant. However, the claimant may still face a tax charge even if they do not receive the payments or are no longer the primary carer.
A common scenario arises where one parent made the original claim years ago, while payments were directed to the other parent. If the child later lives with the receiving parent, the original claimant may still be liable for the charge if their income exceeds £60,000.
The position can also change if the claimant enters a new relationship and their new partner’s income exceeds the threshold. In that case, the new partner may become liable, despite having had no involvement in the original claim.
Practical steps
To avoid unintended outcomes, it is important to review Child Benefit arrangements following separation. In particular, you should:
- confirm who is currently named as the claimant
- ensure the claim reflects the child’s living arrangements
- review any exposure to the High-Income Child Benefit Charge
- notify HMRC promptly if changes are required
Failing to do so can result in unexpected tax liabilities, repayment of overpaid benefit, and potential penalties.
No. Only one claim can be made per child at any time, regardless of the care arrangement
No. Child Benefit cannot be divided or shared, even where care is equal.
In most cases, the parent the child lives with most of the time should claim. Where care is shared equally, parents must agree or HMRC will decide.
HMRC should be notified as soon as possible. The correct parent may need to submit a new claim, and any overpayments may be recovered.
No. Even in 50/50 arrangements, only one parent receives Child Benefit.
There is a presumption that the claimant is the primary carer for maintenance purposes, although this can be challenged depending on the circumstances.
How MFMac can help
Child Benefit is often overlooked during separation, yet it can have significant financial and tax implications. Getting the position right is an important part of achieving a fair and workable outcome.
If you would like advice on Child Benefit arrangements in the context of separation or divorce, please contact Nikki Hunter. Our family law team regularly advises on the interaction between family law, tax and financial arrangements and can ensure Child Benefit is structured appropriately as part of a wider settlement.
