With effect from January 2013, those receiving child benefit and with net adjusted income of £50k or more will be taxed such that all the benefit is reduced to zero at £60k.

This means that the key considerations should be:

• To ensure that both parties in a household have income under £50k or,
• To ensure that net adjusted income is reduced to under £50k by means of gift aid to charities and pension contributions.

A few important points are worth making:

1. Someone can be liable to pay the charge not only if he is entitled to child benefit but also if his spouse/partner is
2. For married couples and civil partners, the liability will arise unless there is a separation by court order
3. The higher earner can elect NOT to receive the child benefit
4. Income is based on what is receivable and not actually paid