Where an individual's income exceeds the basic rate limit there
is a restriction on the amount of CTC the individual gets. See
In1572 for details of this restriction.
For a calculation sheet to use in working out this
restriction in any case see In1308.
For an example where the only restriction to the CTC the
individual gets is because the individual's income is above the
basic rate limit see In1309.
This page has an example showing the interaction of two
restrictions in calculating CTC. For details of other restrictions
to the full amount of CTC see In1572.
The mother and father of a 3 year old boy both live on their
own. Their son lives with each of them for part of the year. They
both claim CTC in respect of the child and neither of them can
claim CTC in respect of any other child. They agree to split the
CTC 60% to the father and 40% to the mother. The full CTC for the
year is £5,200 at 10% = £520.
The mother's income for the year is £15,000 which is
below the basic rate limit. She gets CTC of £2,080 at 10% =
£208.00.
The father's only income is income from his employment of
£34,100. He is entitled to the Personal allowance of
£4,535. The basic rate limit for the year is £29,400. The
father's income exceeds the basic rate limit by £165
([£34,100 less £4,535] less £29,400).
Before any restriction for the level of his income the father
is entitled to CTC of £3,120 at 10% (60% of £5,200 at
10%). As his income exceeds the basic rate limit by £165 his
CTC entitlement is reduced by £110 (£165 x 2/3). So he
will get CTC of £3,010 at 10% = £301.00.
For a further example where the claimant had, during 2002-03,
a
qualifying child living with them who was also a
qualifying baby see In1390 (example 4).
