Income Tax (Trading and Other Income) Act 2005

Introduction U.K.

803 Overview of Chapter 2 U.K.

(1) This Chapter provides relief on income from the provision by an individual of foster care.

The relief is referred to in this Chapter as “foster-care relief”.

(2) The form of relief depends on whether the individual's total foster-care receipts exceed the individual's limit (see sections 807 to 811).

(3) If they do not, the income is not charged to income tax (see sections 812 to 814).

(4) If they do, the individual may elect for an alternative method of calculating the income (see sections 815 to 819).

(5) If the foster-care receipts are the receipts of a trade, special rules apply —

(a) if the period of account of the trade does not end on 5th April (see sections 820 to 823), and

(b) in relation to capital allowances (see sections 824 to 827).

(6) The provisions of this Chapter which are expressed to apply in relation to trades also apply in relation to professions and vocations.

804 Person who qualifies for relief U.K.

(1) An individual qualifies for foster-care relief for a tax year if the individual—

(a) has foster-care receipts for the tax year (see section 805), and

(b) does not derive any taxable income other than foster-care receipts from a relevant trade or arrangement.

(2) “Taxable income” means receipts or other income in respect of which the individual is liable to income tax for the tax year.

(3) A relevant trade or arrangement is one from which the individual derives foster-care receipts for the tax year.