Incapacity Benefit for wife

Incapacity Benefit for wife

Didn't find your answer?

I have taken over a client who in the past had received rental income and Incapacity Benefit.  The rental income received was in the region of £9,500, and the Incapacity Benefit (taxable) about £6,200.  However, the Benefit included an element for his wife, about £2,500 per annum but she has no other income.  Now, my client thinks that his previous accountant should have taken the wife's element out of the IB and therefore should not have paid tax on that amount, as that money belonged to her and had duly paid her.  My client has rang up HMRC and was told that that is correct if he can provide a letter from Jobcentreplus showing how much of the benefit was for his wife and then claim to have that deducted from his income.  I am not sure about this as the IB was received by the husband only, in his name, albeit the Benefit was credited in their joint account, and as such it is taxable on him.  Has anyone out there had experience of this situation and provide an answer.  It would be most appreciated.

Replies (1)

Please login or register to join the discussion.

avatar
By Andywho is fed up
04th Dec 2010 14:52

Incapacity benefit for wife

Maybe I am wrong, but the answer seems simple to me.

Is the situation that your client has made a claim for incapacity benefit and the amount to which HE is entitled is calculated by taking into account the fcat that he has a wife.  If so, then the income is only his.   She has no claim to Incapacity Benefit and he cannot transfer his income to her.  Therefore, it all remains taxable on him! 

Talbottaxxing

Thanks (0)