Part 17Definitions for purposes of Act and final provisions
Definitions for the purposes of Act
1025Meaning of “modified net income”
1
For the purposes of this Act a person’s modified net income for a tax year (“year X”) is the person’s net income for year X calculated in accordance with Steps 1 and 2 of section 23 (calculation of income tax liability) as modified by subsection (2).
2
In applying Steps 1 and 2 of section 23, ignore—
a
any non-qualifying income included in the person’s total income (see section 1026),
b
any relief under Chapter 2 of Part 4 for a loss incurred or treated as incurred, or a payment made, in a tax year later than year X,
c
any reliefs to which the person may be entitled under Chapter 4 of Part 8,
d
any adjustment of profits resulting from a claim under Chapter 16 of Part 2 of ITTOIA 2005 (averaging profits of farmers and creative artists), if year X is the earlier of the tax years in relation to which the claim is made,
e
any adjustment resulting from an election under section 257 of ITTOIA 2005 (election to carry back post-cessation receipts), and
f
any relief or adjustment resulting from the making, amendment or revocation of a claim for relief, if the claim, amendment or revocation would have been out of time but for section 224(4) of ITTOIA 2005 (averaging profits of farmers and creative artists: extension of deadline for claiming other reliefs).
3
This section applies for the purposes of section 427 as if subsection (2)(c) were omitted.
4
This section applies for the purposes of Chapter 9 of Part 9 and Chapter 13 of Part 15 as if for subsection (2)(c) there were substituted—
c
any reliefs to which the person may be entitled under section 505,
5
In this section “claim” includes an election or notice.