Homecarer tax credit eligibility

[Blackrock1]

Hi all, I think I was a bit confused about this, my wife took redundancy a year and a half ago. At the moment she is a stay-at-home mum, at least until the youngest gets established in primary school.

I originally thought if we claimed the home carer tax credit, that we weren't entitled to the married couple's increased tax banding, but when I reread it, it says we aren't entitled to an increased standard rate band if both spouses are working.

So in our scenario, are we entitled to this tax credit if she isn't working, and I am a higher rate income tax payer utilising the married couples increased standard rate band?

 

[RedOnion]

Yes, if you're jointly assessed you can claim this credit. Her personal tax credit can be transferred to you.
Your tax band will be increased to 49k, but that's it.

Note, once she's claiming the credit, any income she has will be at higher rate. So any rental income, dividends, etc. That's the impact of the piece about the standard band not increasing. There's no disadvantage claiming it. If her income goes over the tipping point ti be worthwhile, Revenue will automatically remove it when you request a balancing statement and she'll get increased band reverting back to standard rate tax.