Income Tax (Trading and Other Income) Act 2005

Capital allowances for foster carers carrying on trade U.K.

824 Capital allowances: introduction U.K.

(1) In this group of sections (that is, this section and sections 825 to 827) an individual is a “relevant individual” if in a tax year—

(a) the full foster-care relief in section 813 or 822 (trading income), or

(b) the alternative method of calculating profits under section 816 or 823 (trading income),

applies to the individual for the tax year.

(2) In this group of sections a period is a “relevant chargeable period” of a relevant individual if—

(a) it is a chargeable period of the individual, and

(b) it corresponds to the income period for the individual's foster-care receipts in the tax year for which the individual is a relevant individual.

(3) Expressions—

(a) which are used in CAA 2001 and in this group of sections, but

(b) which are not otherwise defined in this Chapter,

have the same meaning in this group of sections as in CAA 2001.

825 Carried forward unrelieved qualifying expenditure U.K.

(1) This section applies if—

(a) there is available qualifying expenditure in a relevant pool for a relevant chargeable period of a relevant individual,

(b) the expenditure is unrelieved qualifying expenditure carried forward in the pool from the previous chargeable period under section 59 of CAA 2001, and

(c) the previous chargeable period was not a relevant chargeable period.

(2) “Relevant pool” means a pool containing expenditure incurred on the provision of plant or machinery wholly or partly for the provision of foster care by the relevant individual.

(3) CAA 2001 applies in relation to the relevant individual's available qualifying expenditure in the pool for the relevant chargeable period as if—

(a) a disposal event occurred immediately after the beginning of the period,

(b) disposal receipts fall to be brought into account in the pool for the period because of that event, and

(c) the total of the receipts equals the amount of the unrelieved qualifying expenditure carried forward.

(4) Section 13 of CAA 2001 (use for qualifying activity of plant or machinery provided for other purposes) applies as if, on the first day of the first subsequent chargeable period which is not a relevant chargeable period—

(a) the relevant individual brings into use for the provision of foster care such of the plant or machinery on which the unrelieved qualifying expenditure was incurred as the individual still owns on that day, and

(b) the individual owns the plant or machinery as a result of incurring capital expenditure on its provision for other purposes.

826 Excluded capital expenditure U.K.

Capital expenditure (“excluded capital expenditure”) does not constitute qualifying expenditure for the purposes of CAA 2001 if it is—

(a) incurred by a relevant individual in a relevant chargeable period, and

(b) incurred on the provision of plant or machinery wholly or partly for the provision of foster care by the individual.

827 Excluded capital expenditure: subsequent treatment of asset U.K.

If a relevant individual incurs excluded capital expenditure in a relevant chargeable period, section 13 of CAA 2001 applies as if, on the first day of the first subsequent chargeable period which is not a relevant chargeable period—

(a) the individual brings into use for the provision of foster care such of the plant or machinery on which the expenditure was incurred as the individual still owns on that day, and

(b) the individual owns the plant or machinery as a result of incurring capital expenditure on its provision for other purposes.