Tax Credits: Investment income

There is no capital limit for tax credits; the value of any savings/capital is ignored.  However, any taxable income from savings and investments is taken into account as investment income.

Investment income is the gross amount of:

(From 6 April 2016, a nil rate of tax has applied to the first £5,000 of dividend income and this reduces to the first £2,000 of dividend income from 6 April 2018. Similarly, a nil rate of tax applies to the first £1,000 of savings income from 6 April 2016. However, as it is still taxable income, it is taken into account for tax credits.)

The following are disregarded:

Certain payments made from government trust funds or from the Eileen Trust, the 1992 Fund, the Macfarlane Trust or the Independent Living Funds to persons diagnosed with variant Creuzfeldt-Jakob disease or haemophilia, or to their partners, are disregarded. Payments made to the parents of a diagnosed person after their death are also disregarded for a period of two years from the date of first payment. Payments out of the estate of a diagnosed person, up to the amount of trust payments that person had received, are disregarded if paid to their partner, or disregarded for two years if paid to a parent.




Last reviewed/updated 3 November 2023