|
| |
|
Periods of account not ending on 5th April |
| |
820 | Periods of account not ending on 5th April |
| |
Sections 822 and 823 (which deal with the period of account of a trade not |
| |
ending on 5th April) apply if— |
| |
(a) | an individual qualifies for foster-care relief for a tax year, |
| 5 |
(b) | the individual’s foster-care receipts for the tax year are the receipts of a |
| |
| |
(c) | the period of account in which those receipts accrue does not end on 5th |
| |
| |
821 | Meaning of “relevant limit” |
| 10 |
(1) | For the purposes of sections 822 and 823 the “relevant limit” for a period of |
| |
account in which the individual’s foster-care receipts accrue is found by |
| |
| |
(a) | the fixed amount for the tax year in which that period ends or (as the |
| |
case may be) the individual’s share of the fixed amount for that year |
| 15 |
(found in accordance with sections 808 to 810), and |
| |
(b) | for each of the tax years in which the period of account falls, each |
| |
amount per child for the individual for each part of the period of |
| |
account falling in that tax year. |
| |
(2) | For this purpose an individual’s amount per child for a part of the period of |
| 20 |
account is each amount that would be the individual’s amount per child under |
| |
section 811 for the tax year in which the part falls if that part were the income |
| |
| |
| |
(1) | This section applies if the individual’s total foster-care receipts for the period |
| 25 |
of account do not exceed the individual’s relevant limit for the period. |
| |
(2) | The profits or losses of the trade for the tax year are treated as nil. |
| |
823 | Alternative method of calculating profits |
| |
(1) | This section applies if— |
| |
(a) | the individual’s total foster-care receipts for the period of account |
| 30 |
exceed the individual’s relevant limit for the period, and |
| |
(b) | the individual makes an election under this section. |
| |
(2) | The profits of the trade for the tax year are— |
| |
(a) | the individual’s total foster-care receipts for the period of account, less |
| |
(b) | the individual’s relevant limit for the period. |
| 35 |
(3) | Sections 818(2) and (3) and 819 (adjustment of assessment) apply for the |
| |
purposes of an election under this section as they apply for the purposes of an |
| |
election under those sections. |
| |
|
| |
|
| |
|
Capital allowances for foster carers carrying on trade |
| |
824 | Capital allowances: introduction |
| |
(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 |
| 5 |
(b) | the alternative method of calculating profits under section 816 or 823 |
| |
| |
| applies to the individual for the tax year. |
| |
(2) | In this group of sections a period is a “relevant chargeable period” of a relevant |
| |
| 10 |
(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. |
| |
| |
(a) | which are used in CAA 2001 and in this group of sections, but |
| 15 |
(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 |
| |
(1) | This section applies if— |
| |
(a) | there is available qualifying expenditure in a relevant pool for a |
| 20 |
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 |
| |
| |
(c) | the previous chargeable period was not a relevant chargeable period. |
| 25 |
(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— |
| 30 |
(a) | a disposal event occurred immediately after the beginning of the |
| |
| |
(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 |
| 35 |
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 |
| 40 |
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 |
| |
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 |
| 5 |
provision of foster care by the individual. |
| |
827 | Excluded capital expenditure: subsequent treatment of asset |
| |
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— |
| 10 |
(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. |
| 15 |
| |
| |
(1) | This section applies if the profits or losses of a trade for a tax year are calculated |
| |
| |
(2) | Nothing in this Chapter is to be read— |
| 20 |
(a) | as preventing a deduction for overlap profit under section 205 or 220 in |
| |
calculating the profits or losses of the trade for the tax year, or |
| |
(b) | as preventing overlap profit from arising by reference to profits of the |
| |
trade calculated for the tax year in accordance with section 816 or 823 |
| |
(alternative calculation of profits). |
| 25 |
(3) | “Overlap profit” has the same meaning in this section as it has in Chapter 15 of |
| |
Part 2 (see section 204). |
| |
| |
Foreign income: special rules |
| |
| 30 |
| |
| |
| |
(a) | an alternative basis for calculating the amount charged for certain |
| |
relevant foreign income (see Chapter 2), |
| 35 |
(b) | certain deductions in calculating relevant foreign income where that |
| |
basis does not apply (see Chapter 3), and |
| |
(c) | relief where a person is prevented from transferring income to the |
| |
United Kingdom (see Chapter 4). |
| |
|
| |
|
| |
|
830 | Meaning of “relevant foreign income” |
| |
(1) | In this Act “relevant foreign income” means income which arises from a source |
| |
outside the United Kingdom and is chargeable under any of the provisions |
| |
specified in subsection (2). |
| |
| 5 |
(a) | Chapter 2 of Part 2 (trade profits), |
| |
(b) | Chapter 17 of Part 2 (adjustment income), |
| |
(c) | Chapter 3 of Part 3 (profits of property business), |
| |
(d) | Chapter 11 of Part 3 (overseas property income), |
| |
(e) | Chapter 2 of Part 4 (interest), |
| 10 |
(f) | Chapter 4 of Part 4 (dividends from non-UK resident companies), |
| |
(g) | Chapter 7 of Part 4 (purchased life annuity payments), |
| |
(h) | Chapter 8 of Part 4 (profits from deeply discounted securities), |
| |
(i) | Chapter 13 of Part 4 (sales of foreign dividend coupons), |
| |
(j) | section 579 (royalties and other income from intellectual property), |
| 15 |
(k) | Chapter 3 of Part 5 (films and sound recordings: non-trading |
| |
| |
(l) | Chapter 4 of Part 5 (certain telecommunication rights: non-trading |
| |
| |
(m) | section 649 (estate income), |
| 20 |
(n) | Chapter 7 of Part 5 (annual payments not otherwise charged), and |
| |
(o) | Chapter 8 of Part 5 (income not otherwise charged). |
| |
(3) | But “relevant foreign income” does not include income chargeable as a result |
| |
of section 844 (unremittable income: income charged on withdrawal of relief |
| |
| 25 |
(4) | For the treatment of other income as relevant foreign income, see— |
| |
(a) | section 857(3) (a partner’s share of a firm’s trading income), |
| |
(b) | paragraph 6(3) of Schedule 3 to the Commonwealth Development |
| |
Corporation Act 1999 (c. 20) (distributions by the Commonwealth |
| |
Development Corporation), |
| 30 |
(c) | section 575(3) of ITEPA 2003 (taxable pension income: foreign |
| |
| |
(d) | section 613(4) of that Act (taxable pension income: foreign annuities), |
| |
(e) | section 631(3) of that Act (pre-1973 pensions paid under the Overseas |
| |
Pensions Act 1973 (c. 21)), |
| 35 |
(f) | section 635(4) of that Act (taxable pension income: foreign voluntary |
| |
| |
(g) | section 679(2) of that Act (taxable social security income: foreign |
| |
| |
|
| |
|
| |
|
| |
Relevant foreign income charged on remittance basis |
| |
| |
831 | Claims for relevant foreign income to be charged on the remittance basis |
| |
(1) | A person may make a claim for a tax year for the person’s relevant foreign |
| 5 |
income to be charged for that year in accordance with section 832. |
| |
(2) | The claim must state that condition A or B is met. |
| |
(3) | Condition A is that the person is not domiciled in the United Kingdom. |
| |
(4) | Condition B is that the person is not ordinarily UK resident. |
| |
(5) | This section does not apply to relevant foreign income arising in the Republic |
| 10 |
| |
832 | Relevant foreign income charged on the remittance basis |
| |
(1) | If a person makes a claim under section 831(1) for a tax year in respect of |
| |
relevant foreign income, income tax is charged on the full amount of the sums |
| |
received in the United Kingdom in the tax year in respect of the income. |
| 15 |
(2) | For the purposes of subsection (1), it does not matter whether the income arises |
| |
in the year for which the claim is made or arose in an earlier year in which the |
| |
| |
(3) | The only case in which deductions are allowed is where the income is from a |
| |
trade, profession or vocation carried on outside the United Kingdom. |
| 20 |
(4) | In that case the same deductions are allowed as are allowed under the Income |
| |
Tax Acts where the trade, profession or vocation is carried on in the United |
| |
| |
(5) | This section is subject to section 835 (relief for delayed remittances). |
| |
833 | Income treated as remitted: repayment of UK-linked debts |
| 25 |
(1) | For the purposes of section 832, if a person who is ordinarily resident, but is not |
| |
domiciled, in the United Kingdom uses relevant foreign income outside the |
| |
United Kingdom to satisfy a UK-linked debt, the person is treated as receiving |
| |
the income in the United Kingdom at the time when it is so used. |
| |
(2) | Subsection (1) is subject to subsection (5). |
| 30 |
(3) | In subsection (1) “UK-linked debt”, in relation to a person, means— |
| |
(a) | a debt for money lent to the person in the United Kingdom, or for |
| |
interest on money so lent, |
| |
(b) | a debt for money lent to the person outside the United Kingdom and |
| |
received in the United Kingdom, or |
| 35 |
(c) | a debt incurred for satisfying— |
| |
(i) | a debt falling within paragraph (a) or (b), or |
| |
(ii) | another debt falling within this paragraph. |
| |
|
| |
|
| |
|
(4) | In the case of a debt (within subsection (3)(b) or (c)) for money lent to the |
| |
person outside the United Kingdom, it does not matter whether the money lent |
| |
is received in the United Kingdom before or after the income is used to satisfy |
| |
| |
(5) | But in the case of such a debt if the money lent is not received in the United |
| 5 |
Kingdom until after the income is so used, the person is treated as receiving the |
| |
income in the United Kingdom when the money lent is received there (instead |
| |
of at the time provided in subsection (1)). |
| |
(6) | For the purposes of this section, if any of the money lent is used to satisfy a |
| |
debt, the debt for the money so used is treated as incurred for satisfying that |
| 10 |
| |
(7) | In subsections (3) to (5) any reference to money lent being received in the |
| |
United Kingdom includes a reference to its being brought there. |
| |
(8) | Section 834 sets out circumstances in which a person is treated as using income |
| |
to satisfy a debt for the purposes of this section. |
| 15 |
(9) | In this section and that section “satisfy”, in relation to a debt, means satisfy |
| |
| |
834 | Arrangements treated as repayment of UK-linked debts |
| |
(1) | A person to whom money has been lent (“the borrower”) is treated for the |
| |
purposes of section 833 as using relevant foreign income to satisfy a debt if |
| 20 |
conditions A and B are met. |
| |
(2) | Condition A is that the borrower uses the income in such a way that the lender |
| |
holds money or property representing the income on behalf or on account of |
| |
the borrower in such circumstances that it is available to the lender to satisfy |
| |
the debt (by set-off or otherwise). |
| 25 |
(3) | Condition B is that under an arrangement between the borrower and the |
| |
| |
(a) | the amount for the time being owed by the borrower to the lender, or |
| |
(b) | the time at which the debt is to be satisfied, |
| |
| depends in any respect, directly or indirectly, on the amount or value the |
| 30 |
lender holds on behalf or on account of the borrower as mentioned in |
| |
| |
(4) | In this section “lender”, in relation to money lent, includes any person for the |
| |
time being entitled to repayment. |
| |
Relief for delayed remittances |
| 35 |
835 | Relief for delayed remittances |
| |
(1) | If section 832 (relevant foreign income charged on the remittance basis) applies |
| |
to income for a tax year, the person liable for the tax may make a claim for relief |
| |
under this section in respect of any of the income which meets conditions A |
| |
and B (“delayed income”). |
| 40 |
(2) | Condition A is that the income arose before the tax year for which relief is |
| |
| |
|
| |
|
| |
|
(3) | Condition B is that the income could not have been transferred by the person |
| |
to the United Kingdom before the tax year because of— |
| |
(a) | the laws of the territory where the income arose, |
| |
(b) | executive action of its government, or |
| |
(c) | the impossibility of obtaining there currency that could be transferred |
| 5 |
| |
(4) | If a person claims relief for a tax year in respect of delayed income, that income |
| |
is to be deducted from the income charged to tax for that year in accordance |
| |
| |
(5) | The delayed income is to be treated as if it were income received in the United |
| 10 |
Kingdom in the tax year in which it arose. |
| |
836 | Relief for delayed remittances: backdated pensions |
| |
(1) | This section applies if— |
| |
(a) | section 832 applies to a pension or annuity, or an increase in a pension |
| |
or annuity, that is treated as relevant foreign income as a result of |
| 15 |
section 575(3), 613(4) or 635(4) of ITEPA 2003, |
| |
(b) | the pension, annuity or increase was granted retrospectively, and |
| |
(c) | an amount of pension, annuity or increase is paid in respect of a tax |
| |
year (“the earlier year”) before the tax year in which it was granted. |
| |
(2) | For the purposes of section 835 that amount of pension, annuity or increase is |
| 20 |
treated as income arising in the earlier year from a source that the person liable |
| |
for the tax possessed in the earlier year. |
| |
(3) | The condition in section 835(3) only applies to the pension, annuity or increase |
| |
in the period after it becomes payable. |
| |
837 | Claims for relief on delayed remittances |
| 25 |
(1) | A claim under section 835 must be made on or before the fifth anniversary of |
| |
the normal self-assessment filing date for the tax year for which the relief is |
| |
| |
(2) | All adjustments (by way of repayment of tax, assessment or otherwise) are to |
| |
be made which are necessary to give effect to section 835. |
| 30 |
(3) | Those adjustments may be made at any time, despite anything to the contrary |
| |
| |
(4) | A person’s personal representatives may make any claim under section 835 |
| |
which the person might have made. |
| |
| 35 |
(a) | any tax paid by the person and repayable because of a claim under |
| |
section 835 is to be repaid to the personal representatives, and |
| |
(b) | the person’s personal representatives are liable for any additional tax |
| |
which arises because of a claim under that section. |
| |
(6) | If subsection (5)(b) applies, the additional tax— |
| 40 |
(a) | is to be assessed on the personal representatives, and |
| |
(b) | is a debt due from and payable out of the estate. |
| |
|
| |
|