From 7 January 2013 child benefit for those with income of £50,000 or above will be reduced or withdrawn. For this purpose “income” is all taxable income, less any charity donations and less any gross pension. This figure cannot be reliably calculated until after the end of the tax year. For couples, the relevant income figure is simply the income of the higher earner.

Adjusted net income over £60,000 will result in tax charge of 100% the child benefit received. Income between £50,000 and £60,000 will give a tax charge based on a sliding scale increasing by 1% for every £100 over £50,000.
The clawback will be implemented through an additional tax charge on the earner with the income over the threshold of £50,000. Alternatively the person receiving the child benefit is able to elect to stop receiving the benefit and then there will not be an adjustment required through self-assessment. We recommend that if the higher earner is already in self-assessment it makes sense to remain in the child benefit system and have a tax charge.
The first of these tax charges will be for the current (2012-13) tax year, will be based on earnings for the whole of this tax year. However the child benefit amount used in the calculation will only be child benefit from 7 January 2013.

It is in the interest of any couple to keep the income of both parties involved below £50,000 if possible. A review into share ownership, bonus allocation, pension payments and gift aid contributions could be beneficial to give a more even income split.