HMRC internal manual

Tax Credits Technical Manual

TCTM04803 - Notional Income: Claimants depriving themselves of income in order to secure entitlement

The Tax Credits (Definition and Calculation of Income) Regulations 2002, Reg.15

Deprivation occurs if a claimant gives up, or transfers to another person, an income which was received, or due to be received, to gain or increase entitlement to tax credits.

For example, a claimant may, by a deed of gift, transfer entitlement to an occupational pension to someone else.

Purpose of disposal of the income

The claimant may have more than one reason for disposing of the income, only one of which is to obtain tax credit or more tax credit. Securing or increasing entitlement to tax credit may not be a claimant’s main motive but it must be a significant one.