Finance (No. 2) Act 1992

6 The following section shall be inserted after section 261—

“261A Additional relief in respect of children for year of separation

(1) A person who proves that a qualifying child is resident with him for any period—

(a) after he and his spouse separate, and

(b) in the year of assessment in which that separation occurs,

shall be entitled to a deduction from his total income of an amount equal to that specified in section 257A(1) for the year.

(2) But if the person is entitled to relief for the year of assessment under section 257A (including by virtue of an election under section 257BA) the amount that he is entitled to deduct under subsection (1) above shall be reduced by the amount of that relief (to nil where the amount of that relief equals or exceeds it).

(3) Subsection (1) above shall not apply to a man who is entitled to relief under section 259 by virtue of subsection (1)(c) of that section.

(4) A person is entitled to only one deduction under subsection (1) above irrespective of the number of qualifying children resident with him.

(5) Where for any year of assessment a person is entitled to relief under this section and another person is entitled to relief in connection with the same child under section 259 or this section—

(a) the total amount of the relief to which those persons are entitled shall not exceed the amount specified in section 257A(1) for that year,

(b) section 260(3) to (5) shall apply for the purpose of apportioning that total amount between the persons (and the reference in section 260(4) to section 259 shall be taken to include a reference to this section), and

(c) the deduction to which each of them is entitled under section 259 or this section shall be equal to so much of that amount as is apportioned to him (subject, in the case of relief under this section, to subsection (2) above).

(6) In this section, “separate” means—

(a) separate under an order of a court of competent jurisdiction, or by deed of separation, or

(b) separate in such circumstances that the separation is likely to be permanent.

(7) Subsections (5) to (9) of section 259 shall apply for the purposes of this section as they apply for the purposes of that section.”