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HMRC internal manual

Tax Credits Technical Manual

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HM Revenue & Customs
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Notional Income: Claimants have income available to them on application

The Tax Credits (Definition and Calculation of Income) Regulations 2002, Reg.16

If income would become available to a person if he applied for it, then he is treated as having that income, even if he has not received it.

This does not apply to income payable under:

  • a trust derived from a payment made because of a personal injury or
  • under a personal pension scheme or retirement annuity contract
  • an award of damages for personal injury which is administered by the court or
  • as a rehabilitation allowance made under specified legislation section 2 of Employment Act

nor does it apply to income either

  • by way of a Category A or Category B retirement pension (as defined by the Contributions and Benefits Act) or
  • by way of a graduated retirement benefit (a pension payable under section 36 or 37 of the National Insurance Act 1965 or section 35 and 36 of the National Insurance Act (Northern Ireland)1966(a) or
  • by way of a shared additional pension (a pension payable by virtue of section 55A of the Contributions and Benefits Act or section 55A of the Northern Ireland contributions and Benefits Act)

payment of which has been deferred.