Tax & Finance

#2026/538Kinship Zone Allowance Payments Exempted from Income Tax

🇬🇧United Kingdom··Other·Low Impact·View source ↗

AI-generated summary for informational purposes only. Not legal advice. See the original source for the authoritative text.

🇬🇧 English

Kinship allowance payments made under the Kinship Zones pilot scheme will not be taxed as income. The change applies to eligible kinship carers in England and Wales who receive weekly financial support from selected local authorities funded by the Department for Education. For carers, this means the full allowance can be used to help cover the cost of caring for a child, rather than part of it being lost to income tax. Local authorities running the scheme should treat these payments as tax-exempt from 9 June 2026.

AI-generated summary. May contain errors. Refer to official sources for legal decisions.

Key Changes

  • Adds Kinship Zones allowance payments to the list of payments exempt from income tax
  • Applies to payments made to people caring for a child under the Kinship Zones pilot scheme
  • Takes effect on 9 June 2026 in England and Wales

Obligations

What this law requires

medium

Treat kinship allowance payments made under the Kinship Zones scheme to persons providing care to a child as exempt from income tax from 9 June 2026.

HM Revenue and Customsselected local authorities administering Kinship Zones payments
From 9 June 2026
operational
medium

Selected local authorities in England and Wales providing weekly financial allowances to eligible kinship carers under the Kinship Zones scheme must not treat those payments as taxable income when administering the allowance.

selected local authorities in England and Wales participating in Kinship Zones
From 9 June 2026
operational

Affected Parties

Kinship carers receiving Kinship Zones allowancesSelected local authorities in England and Wales+1 more…

Tags

income tax,kinship care,local authorities…