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Neutral Citation Number:	2011 UKUT 322 AAC
Reported Number:
File Number:	CTC 2520 2010
Appellant:	AW
Respondent:	Her Majesty's Revenue & Customs
Judge/Commissioner:	Other Judges / Other Commissioners/Deputy Commissioners
Date Of Decision:	08/08/2011
Date Added:	12/10/2011
Main Category:	European Union law
Main Subcategory:	Agreement on European Economic Area
Secondary Category:	European Union law
Secondary Subcategory:	Council regulations 1408/71/EEC and (EC) 883/2004
Notes:	Reported as [2012] AACR 18. European Union law – whether child tax credit is a supplement to state retirement pension within the meaning of Article 77 of Regulation 1408/71/EEC and therefore exportable to Iceland The appellant and his wife were in receipt of child tax credit in respect of their children. The appellant was also in receipt of a Category A state retirement pension. They moved permanently to Iceland in February 2009. State retirement pension continued in payment, but Her Majesty’s Revenue and Customs stopped payment of tax credit on the grounds that the family were no longer in the United Kingdom and therefore no longer met one of the conditions in section 3(3) of the Tax Credits Act 2002. The First-tier Tribunal dismissed his appeal and he appealed to the Upper Tribunal. The dispute in the appeal centred on whether child tax credit in the circumstances of the case was an exportable benefit under Regulation 1408/71 (EEC), as applied to Iceland, one of the three countries of the European Economic Area. In PF and SF v HMRC (TC) [2010] UKUT 49 (AAC) it had been held that child tax credit was not a family allowance within the meaning of Article 77 of Regulation 1408/71/EEC as it was not granted exclusively by reference to the number and ages of the children in question, but was a means-tested benefit. However, the Upper Tribunal judge considered whether in this case child tax credit could be regarded as an increase or supplement to state retirement pension in respect of the pensioner’s children and therefore as exportable under the alternative limb of Article 77.1. Held, allowing the appeal, that: 1. the history of child tax credit showed that it was the direct successor to the increases in retirement pension provided for in section 80 of the Social Security Contributions and Benefits Act, and since the calculation of child tax credit took account of state retirement pension, it constituted in the circumstances of this particular case, an increase or supplement to that pension payable in respect of children of the pensioner. The child tax credit therefore fell within Article 77 and was payable in Iceland (paragraphs 53 to 57); 2. the tribunal had erred in considering only the first limb of Article 77 and failing to consider the second limb (paragraphs 58 to 59); 3. while the entering into force from 1 May 2010 of Regulation (EC) No 883/2004, with its broader definition of “family benefits”, had resolved the issue in relation to the 27 Member States of the European Union, the position of those living in Iceland, Lichtenstein and Norway would continue to be governed by Regulation 1408/71 from 1 May 2010 until such time as the provisions of Regulation 883/2004 were extended to those countries (paragraphs 63 to 66).
Decision(s) to Download:	[2012] AACR 18bv.doc [2012] AACR 18ws.doc