Shelter your cash to save £500,000

 

13 january 2013

 

MIDDLE-CLASS families face an effective pay cut of almost £4,000 after new child benefit rules took effect last week, according to analysts.

However, experts say that top earners can save more than £500,000 in tax by arranging their finances to take full advantage of reliefs and allowances.

More than 1m families lost some, or all, their child benefit payments from last Monday. Under the rules, families with one parent on a taxable income of more than £50,000 lose some of the benefit, and it is withdrawn entirely if one parent earns above £60,000.

The benefit, which is £20.30 a week for the first child, and then £13.40 for each child after that, typically lasts until the age of 16. This adds up to £1,752 a year for a two-child family and £2,449 for households with three children.