Jeff Salway: Confusion grows over child benefit changes IF YOU'VE received a letter about impending changes to your child benefit payments, you may well be feeling a little confused right now. The chances are that you have just two options open to you, neither of which will seem very palatable - not claiming payments to which you're entitled, or continuing to claim them but at the risk of falling foul of the Revenue. Accountants may be happy about it, but they're on their own because the changes are becoming the cause of great confusion and stress. It's all the brainchild of a Chancellor who spent much of 2008-2010 telling anyone who would listen that he intended to sort out the mess that was the UK tax system. That Labour bequeathed a horrendously complex tax regime is not in doubt. That the current lot are conspiring to make it even worse is remarkable. Nowhere is this more apparent than in the child benefit tax debacle. More than a million families will be affected by the change, taking effect in January. In a nutshell - if that's possible - child benefit payments are being reduced for households with at least one person earning more than £50,000, before being withdrawn entirely above £60,000. Families with three kids aged under six could lose out by up to £50,000 as a result of the measure, by the time their youngest turns 18, PwC has estimated, while those with two young children could lose nearly £40,000. Aside from the potential cost, the original complaint was that while families with income of £50,000 a year through one earner will lose some or all of their benefit, those with income of £98,000 but with both parents earning £49,000 will get it. In the long run, however, the anger will focus on the way in which the benefit is being taken away. That's because it's being done through the high income child benefit charge (HICBC) - 1 per cent of the benefit cut for every £100 above £50,000. Those affected have two main options: either they no longer claim the benefit from January, or they continue claiming it and have some or all of it clawed back through self-assessment. Since when was dragging thousands more people into the self-assessment system a good way of simplifying the tax system? HMRC will be licking its lips at the chance to raise money by penalising those who fall foul of the new rules. There will be plenty of opportunities, particularly where income fluctuates or circumstances change. The anomalies are numerous and, as usual, will become evident to policymakers only once taxpayers have started paying the price. For parents facing the HICBC, opting out will be the easiest thing to do. Even this comes with pitfalls, however. Tax experts advise those eligible for the benefit to claim it even if they don't receive the actual cash, to ensure they qualify for National Insurance credits that help protect their state pension. So much for making the tax system less complex, as Osborne claimed he would. ALL eyes will be on the US election this week, and not just out of political interest. At the forefront of investors" minds will be how markets react to the result. Markets usually respond more positively to Republican wins, though, historically, they've gone on to fare better after a Democrat incumbent has secured a second term. The biggest concern is what happens if Obama wins but the Republicans retain control of the Senate. That combination took the US to the brink of default in summer 2011 and the looming backdrop to this election is the fiscal cliff - the expiry in January of billions in tax cuts and the start of $1.2 trillion spending cuts. The priority for the President, whoever it is, will be a solution to those tax hikes and spending cuts, which could send the US economy spiralling back into recession. And even now, when the US sneezes, the rest of the world catches a cold, as they say. It's easy to feel remote from this, but through our investments and pension savings many of us have a stake in what happens next across the pond. What's curious is that investors have been lukewarm towards the US for some time. The average UK investor has just 4 per cent exposure to the US, according to Chelsea Financial Services. In contrast, the typical global fund has 43 per cent of its assets in the US, Trustnet figures show. So while nerves will be jangling over the coming few months, the argument could be in favour of UK investors and savers having more money in the US, particularly if they're in it for the long term. There are some very good US-focused funds and investment trusts out there, but global funds may well be the best way forward if you want US exposure.