(1) No liability to income tax arises as a result of Chapter 8 of Part 5 (income not otherwise charged) in respect of a gain arising to a person in the course of dealing in—
(a) commodity or financial futures,
(b) traded options, or
(c) financial options.
(2) The reference in subsection (1) to a gain arising in the course of dealing in commodity or financial futures includes a gain regarded as so arising under section 143(3) of TCGA 1992 (gains arising from transactions otherwise than in the course of dealing on a recognised futures exchange, involving authorised persons).
(3) In this section—
“commodity or financial futures” means commodity futures or financial futures that are for the time being dealt in on a recognised futures exchange,
“financial option” has the meaning given by section 144(8)(c) of TCGA 1992, and
“traded option” has the meaning given by section 144(8)(b) of that Act.
(1) No liability to income tax arises in respect of a disabled person's vehicle maintenance grant.
(2) For this purpose a “disabled person's vehicle maintenance grant” means a grant to any person owning a vehicle that is made under—
(a) paragraph 10 of Schedule 1 to the National Health Service Act 2006 or paragraph 10 of Schedule 1 to National Health Service (Wales) Act 2006
(b) section 46(3) of the National Health Service (Scotland) Act 1978 (c. 29), or
(c) Article 30 of the Health and Personal Social Services (Northern Ireland) Order 1972 (S.I. 1972/1265 (N.I. 14)).
(1) No liability to income tax arises in respect of a payment that is made—
(a) by way of training grant under the “New Deal 50plus” scheme, and
(b) to a person as a participant in that scheme.
(2) For this purpose the “New Deal 50plus” scheme means —
(a) the scheme under section 2(2) of the Employment and Training Act 1973 (c. 50) known as “New Deal 50plus”, or
(b) the corresponding scheme under section 1 of the Employment and Training Act (Northern Ireland) 1950 (c. 29 (N.I.)).
(1) No liability to income tax arises in respect of a payment that is made to a person as a participant in an employment zone programme.
(2) For this purpose an “employment zone programme” means an employment zone programme established for an area or areas designated under section 60 of the Welfare Reform and Pensions Act 1999 (c. 30).
(1) No liability to income tax arises in respect of income arising to an individual from the sale of electricity generated by a microgeneration system if—
(a) the system is installed at or near domestic premises occupied by the individual, and
(b) the individual intends that the amount of electricity generated by it will not significantly exceed the amount of electricity consumed in those premises.
(2) In subsection (1)—
“domestic premises” means premises used wholly or mainly as a separate private dwelling, and
“microgeneration system” has the same meaning as in section 263AZA of the Taxation of Chargeable Gains Act 1992.
782B Renewables obligation certificates for domestic microgeneration
(1) No liability to income tax arises in respect of the receipt by an individual of a renewables obligation certificate if—
(a) the individual receives the certificate in connection with the generation of electricity by a microgeneration system,
(b) the system is installed at or near domestic premises occupied by the individual, and
(c) the individual intends that the amount of electricity generated by it will not significantly exceed the amount of electricity consumed in those premises.
(2) In subsection (1)—
“domestic premises” and “microgeneration system” have the same meaning as in section 782A, and
“renewables obligation certificate” means a certificate issued under section 32B of the Electricity Act 1989 or Article 54 of the Energy (Northern Ireland) Order 2003.
782C Volunteers etc: compensation for lost employment income
(1) No liability to income tax arises in respect of a payment by a relevant authority to a person if—
(a) the person performs services for the authority for no financial benefit in a period in which he or she is also employed,
(b) the payment is made solely to compensate the person for lost employment income for the period (and accordingly does not exceed the amount of that income), and
(c) the person does not perform the services as the holder of an office with the authority (as to which, see section 299A of ITEPA 2003).
(2) For the purposes of subsection (1) a person performs services for no financial benefit if, at the time the payment referred to in that subsection is made, the person—
(a) is not entitled to any payment or benefit in connection with performing the services,
(b) has not received any such payment or benefit, and
(c) does not expect to receive any such payment or benefit.
(3) For the purposes of subsection (2)(a), (b) and (c) disregard—
(a) a payment in respect of reasonable expenses incurred in performing the services,
(b) a payment compensating the person for loss of social security income arising as a result of performing the services, and
(c) a payment to which subsection (1) applies.
(4) In subsection (1)(b) “lost employment income” means the difference between—
(a) the amount of employment income, after deduction of tax and national insurance contributions, that the person would have received from the employment for the period if he or she had not performed the services, and
(b) the amount of employment income, after deduction of tax and national insurance contributions, that the person did receive from the employment for the period.
(5) In this section—
“employment” has the meaning given by section 4 of ITEPA 2003;
“relevant authority” has the meaning given by section 299A of ITEPA 2003;
“services” includes services as a juror;
“social security income” has the meaning given by section 657 of ITEPA 2003.
783 General disregard of exempt income for income tax purposes
(1) Amounts of income which are exempt from income tax as a result of this Part (whether because the type of income concerned is exempt from every charge to income tax or because it is exempt from every charge that is relevant to those particular amounts) are accordingly to be ignored for all other income tax purposes.
(2) There are exceptions to this in the following cases.
(2A) Interest on deposits in ordinary accounts with the National Savings Bank which is exempt under this Part from every charge to income tax is not to be ignored for the purpose of providing information.
(2B) Interest paid to or in respect of victims of National-Socialist persecution which is so exempt is not to be ignored for the purposes of sections 17 and 18 of TMA 1970 (information provisions relating to interest).
(3) These express exceptions to subsection (1) are without prejudice to the existence of any other implied or express exception to that subsection (whether in connection with the provision of information or otherwise).
(1) This Chapter gives relief to an individual on—
(a) the income of a relevant trade (see section 783AA), and
(b) miscellaneous income (see section 783AB).
(2) If the individual qualifies for full relief (see section 783AE), the individual's relevant income (see section 783AC) is not charged to income tax (see sections 783AF and 783AG).
(3) If the individual qualifies for partial relief (see section 783AH), the individual's relevant income is calculated by alternative methods (see sections 783AI to 783AK).
(4) Any provision of this Chapter which gives relief is subject to sections 783AN to 783AQ, which specify circumstances in which relief under this Chapter is not given.
(1) For the purposes of this Chapter, a trade carried on by an individual is a “relevant trade” of the individual for a tax year if—
(a) the individual carries on the trade otherwise than in partnership, and
(b) the trade is not a rent-a-room trade in relation to the individual for the tax year.
(2) For the purposes of subsection (1)(b) a trade is a “rent-a-room trade” in relation to an individual for a tax year if—
(a) the individual qualifies for rent-a-room relief for the tax year, and
(b) the individual has rent-a-room receipts for the tax year which would, apart from Chapter 1 of Part 7 (rent-a-room relief), be brought into account in calculating the profits of the trade.
See section 783AR for definitions relevant to this subsection.
(3) In this Chapter references to a trade include references to a profession or vocation.
(1) For the purposes of this Chapter, an individual's “miscellaneous income” for a tax year is all the income arising to the individual in the tax year which would be chargeable to income tax under Chapter 8 of Part 5 (income not otherwise charged) for the tax year.
(2) But if—
(a) the individual qualifies for rent-a-room relief for the tax year, and
(b) the individual has rent-a-room receipts for the tax year which would, apart from Chapter 1 of Part 7, be chargeable to income tax under Chapter 8 of Part 5,
the rent-a-room receipts are not miscellaneous income.
(3) The reference in subsection (1) to the amount which would be chargeable to income tax under Chapter 8 of Part 5 is to the amount which would be so chargeable—
(a) apart from this Chapter, and
(b) if no deduction were made for expenses or any other matter.
(1) For the purposes of this Chapter, an individual's “relevant income” for a tax year is the sum of the following—
(a) the receipts for the tax year of the individual's relevant trades for the tax year, and
(b) the individual's miscellaneous income for the tax year.
(2) In subsection (1)(a) the reference to the receipts of a trade for a tax year is to all the amounts which would, apart from this Chapter, be brought into account as a receipt in calculating the profits of the trade for the tax year.
(1) For the purposes of this Chapter, an individual's trading allowance for a tax year is £1,000.
(2) The Treasury may by regulations amend subsection (1) so as to substitute a higher sum for the sum for the time being specified in that subsection.
(1) An individual qualifies for full relief for a tax year if—
(a) the individual has relevant income for the tax year,
(b) the relevant income does not exceed the individual's trading allowance for the tax year, and
(c) no election by the individual under section 783AL has effect for the tax year (election for full relief not to be given).
(2) An individual also qualifies for full relief for a tax year if—
(a) the individual has relevant income for the tax year which consists of or includes receipts of one or more relevant trades,
(b) the relevant income exceeds the individual's trading allowance for the tax year,
(c) the conditions mentioned in subsection (3) are met,
(d) no election by the individual under section 783AL has effect for the tax year, and
(e) no election by the individual under section 783AM has effect for the tax year (election for partial relief).
(3) The conditions are that—
(a) the cash basis applies for the tax year in relation to one or more of the trades mentioned in subsection (2)(a);
(b) the individual's relevant income would not exceed the individual's trading allowance for the tax year if it were to be assumed that an election by the individual under section 25C(1) had effect for the tax year, in relation to one or more of the trades mentioned in paragraph (a)
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(1) This section applies if—
(a) an individual qualifies for full relief for a tax year, and
(b) the individual's relevant income for the tax year consists of or includes receipts of one or more relevant trades.
(2) The profits or losses of each such trade for the tax year are treated as nil.
(1) This section applies if—
(a) an individual qualifies for full relief for a tax year, and
(b) the individual's relevant income for the tax year consists of or includes miscellaneous income.
(2) The amount of—
(a) the miscellaneous income arising in the tax year, less
(b) any expenses associated with that income,
is treated as nil.
783AH Partial relief: alternative calculation of profits: introduction
An individual qualifies for partial relief for a tax year if—
(a) the individual has relevant income for the tax year,
(b) the relevant income exceeds the individual's trading allowance for the tax year, and
(c) an election by the individual under section 783AM has effect for the tax year (election for partial relief).
783AI Partial relief: alternative calculation of trade profits
(1) This section applies if—
(a) an individual qualifies for partial relief for a tax year, and
(b) the individual's relevant income for the tax year consists of or includes receipts of one or more relevant trades.
(2) The profits or losses for the tax year of each of the individual's relevant trades are given by taking the following steps—
Step 1 Calculate the total of all the amounts which would, apart from this Chapter, be brought into account as a receipt in calculating the profits of the trade for the tax year.
Step 2 Subtract the deductible amount.
...
(3) Subject to section 783AK, the deductible amount is equal to the individual's trading allowance for the tax year.
(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
783AJ Partial relief: alternative calculation of chargeable miscellaneous income
(1) This section applies if—
(a) an individual qualifies for partial relief for a tax year, and
(b) the individual's relevant income for the tax year consists of or includes miscellaneous income.
(2) The amount of miscellaneous income chargeable to income tax for the tax year is—
(a) the miscellaneous income for the tax year, less
(b) the deductible amount.
(3) Subject to section 783AK, the deductible amount is equal to the individual's trading allowance for the tax year.
783AK Deductible amount: splitting of trading allowance
(1) This section applies where the individual's relevant income for the tax year includes—
(a) receipts of a relevant trade, and
(b) receipts of any other relevant trade or miscellaneous income (or both).
(2) The references in section 783AI and (where it applies) section 783AJ to the deductible amount are to amounts which, in total, equal the individual's trading allowance for the tax year.
(3) The question of how to allocate the individual's trading allowance for the tax year for the purposes of subsection (2) is to be decided by the individual, subject to subsections (4) and (5).
(4) The deductible amount in respect of a relevant trade must not be such that the amount given by step 2 of section 783AI(2) is negative.
(5) The deductible amount in respect of miscellaneous income must not be such as to result in the individual making a loss in the transactions giving rise to the miscellaneous income.
(1) An individual may elect not to be given full relief for a tax year (see sections 783AF and 783AG).
(2) An election must be made on or before the first anniversary of the normal self-assessment filing date for the tax year for which the election is made.
(1) An individual may elect for partial relief to be given for a tax year if the individual's relevant income for the tax year exceeds the individual's trading allowance for the tax year (see sections 783AI and 783AJ).
(2) An election must be made on or before the first anniversary of the normal self-assessment filing date for the tax year for which the election is made.
783AN Exclusion from relief: expenses deducted against rent-a-room receipts
(1) No relief under this Chapter is given to an individual for a tax year if—
(a) the individual qualifies for rent-a-room relief for the tax year,
(b) the individual has rent-a-room receipts mentioned in subsection (2) for the tax year, and
(c) condition A or B is met.
(2) The rent-a-room receipts mentioned in subsection (1) are—
(a) rent-a-room receipts which would, apart from Chapter 1 of Part 7 (rent-a-room relief), be brought into account in calculating the profits of a trade, or
(b) rent-a-room receipts which would, apart from Chapter 1 of Part 7, be chargeable to income tax under Chapter 8 of Part 5 (income not otherwise charged).
(3) Condition A is that—
(a) the individual's total rent-a-room amount for the tax year does not exceed the individual's limit for the tax year (see section 783AR), and
(b) an election by the individual under section 799 has effect to disapply full rent-a-room relief for the tax year.
(4) Condition B is that—
(a) the individual's total rent-a-room amount for the tax year exceeds the individual's limit for the tax year, and
(b) no election by the individual under section 800 has effect to apply the alternative method of calculating profits for the tax year.
No relief under this Chapter is given to an individual for a tax year if—
(a) the individual has relevant income for the tax year, and
(b) the income includes a payment made by, or on behalf of, a person at a time when the individual is—
(i) an employee of the person, or
(ii) the spouse or civil partner of an employee of the person.
No relief under this Chapter is given to an individual for a tax year if—
(a) the individual has relevant income for the tax year, and
(b) the income includes a payment made by, or on behalf of, a firm at a time when the individual is—
(i) a partner in the firm, or
(ii) connected with a partner in the firm.
783AQ Exclusion from relief: payments by close company
(1) No relief under this Chapter is given to an individual for a tax year if—
(a) the individual has relevant income for the tax year, and
(b) the income includes a payment made by, or on behalf of, a close company at a time when the individual is—
(i) a participator in the close company, or
(ii) an associate of a participator in the close company.
(2) In this section “associate” and “participator” have the same meanings as in Part 10 of CTA 2010 (see sections 448 and 454).
In this Chapter—
(a) “rent-a-room relief”, “rent-a-room receipts” and “total rent-a-room amount” have the same meanings as in Chapter 1 of Part 7 (rent-a-room relief: see sections 784, 786 and 788), and
(b) references to “the individual's limit” are to be construed in accordance with section 789 (the individual's limit for the purposes of rent-a-room relief).
(1) This Chapter gives relief to an individual on certain income of a relevant property business (see sections 783BA and 783BB).
(2) The form of relief depends on whether the individual's relevant property income exceeds the individual's property allowance (see sections 783BC and 783BD).
(3) If the individual's relevant property income does not exceed the individual's property allowance, the income is not charged to income tax (unless the individual elects otherwise) (see sections 783BE and 783BF).
(4) If the individual's relevant property income does exceed the individual's property allowance, the individual may elect for an alternative method of calculating the income (see sections 783BG to 783BI).
(5) Any provision of this Chapter which gives relief is subject to sections 783BL to 783BP, which specify circumstances in which relief under this Chapter is not given.
783BA “Relevant property business” of an individual
(1) Subject to subsection (3), for the purposes of this Chapter an individual's property business is a “relevant property business” for a tax year if the business is not a rent-a-room property business in relation to the individual for the tax year.
(2) For the purposes of subsection (1) a property business is a “rent-a-room property business” in relation to an individual for a tax year if—
(a) the individual qualifies for rent-a-room relief for the tax year, and
(b) all the receipts which would, apart from Chapter 1 of Part 7 (rent-a-room relief), be brought into account in calculating the profits of the business, are rent-a-room receipts.
See section 783BQ for definitions relevant to this subsection.
(3) If an individual receives—
(a) property income distributions which are treated as profits of a UK property business by virtue of regulation 69Z18(1) or (2) of the AIF Regulations (property AIF distributions: liability to tax), or
(b) distributions which are treated as profits of a UK property business by virtue of section 548(6) of CTA 2010 (REIT distributions: liability to tax),
that separate property business (see regulation 69Z18(6) of the AIF Regulations and section 549(5) of CTA 2010) is not a relevant property business of the individual.
(4) In subsection (3) “the AIF Regulations” means the Authorised Investment Funds (Tax) Regulations 2006 (S.I. 2006/964).
783BB “Relievable receipts” of a property business
(1) For the purposes of this Chapter, the “relievable receipts” of an individual's relevant property business for a tax year are all the amounts which would, apart from this Chapter, be brought into account as a receipt in calculating the profits of the business for the tax year.
This is subject to subsections (2) and (3).
(2) If—
(a) the individual qualifies for rent-a-room relief for the tax year, and
(b) the individual has rent-a-room receipts for the tax year which would, apart from Chapter 1 of Part 7, be brought into account in calculating the profits of the property business,
the rent-a-room receipts are not relievable receipts of the business.
(3) Non-relievable balancing charges in respect of the property business for the tax year are not relievable receipts of the business.
(4) In subsection (3) “non-relievable balancing charges”, in respect of a property business for a tax year, means balancing charges falling to be made for the tax year under Part 2 of CAA 2001 which do not relate to a business or transaction which is carried on, or entered into, for the purpose of generating receipts which are relievable receipts of the property business.
For the purposes of this Chapter, an individual's “relevant property income” for a tax year is the relievable receipts for the tax year of the individual's relevant property businesses for the tax year.
(1) For the purposes of this Chapter, an individual's property allowance for a tax year is £1,000.
(2) The Treasury may by regulations amend subsection (1) so as to substitute a higher sum for the sum for the time being specified in that subsection.
An individual qualifies for full relief for a tax year if—
(a) the individual has relevant property income for the tax year,
(b) the relevant property income does not exceed the individual's property allowance for the tax year, and
(c) no election by the individual under section 783BJ has effect for the tax year (election for full relief not to be given).
(1) If an individual qualifies for full relief for a tax year, this section applies in relation to the calculation of the profits of the individual's relevant property business for the tax year or, where the individual's relevant property income for the tax year consists of the relievable receipts of two relevant property businesses, the profits of each property business for the tax year.
(2) The following are not brought into account—
(a) the relievable receipts of the property business for the tax year, and
(b) any expenses associated with those receipts.
783BG Partial relief: alternative calculation of property profits: introduction
An individual qualifies for partial relief for a tax year if—
(a) the individual has relevant property income for the tax year,
(b) the relevant property income exceeds the individual's property allowance for the tax year, and
(c) an election by the individual under section 783BK has effect for the tax year (election for partial relief).
783BH Partial relief: alternative calculation of property profits
(1) If an individual qualifies for partial relief for a tax year, this section applies in relation to the calculation of the profits of the individual's relevant property business for the tax year or, where the individual's relevant property income for the tax year consists of the relievable receipts of two relevant property businesses, the profits of each property business for the tax year.
(2) The relievable receipts of the property business for the tax year are brought into account.
(3) No relevant expenses are brought into account.
(4) The deductible amount is brought into account.
(5) Subject to section 783BI, the deductible amount is equal to the individual's property allowance for the tax year.
(6) In subsection (3) “relevant expenses” means all the amounts—
(a) which would, apart from this section, be brought into account as a deduction in calculating the profits of the business for the tax year, and
(b) which are associated with the relievable receipts.
783BI Deductible amount: splitting of property allowance
(1) This section applies where the individual's relevant property income for the tax year consists of the relievable receipts of two relevant property businesses.
(2) The references in section 783BH to the deductible amount are to amounts which, in total, equal the individual's property allowance for the tax year.
(3) The question of how to allocate the individual's property allowance for the tax year for the purposes of subsection (2) is to be decided by the individual, subject to subsection (4).
(4) The deductible amount in respect of a relevant property business must not be such as to result in a loss of the business.
(1) An individual may elect not to be given full relief for a tax year (see section 783BF).
(2) An election must be made on or before the first anniversary of the normal self-assessment filing date for the tax year for which the election is made.
(1) An individual may elect for partial relief to be given for a tax year if the individual's relevant property income for the tax year exceeds the individual's property allowance for the tax year (see section 783BH).
(2) An election must be made on or before the first anniversary of the normal self-assessment filing date for the tax year for which the election is made.
783BL Exclusion from relief: tax reduction under section 274A
No relief under this Chapter is given to an individual for a tax year if, in calculating the individual's liability to income tax for the tax year, a tax reduction under section 274A (property business: relief for non-deductible costs of a dwelling-related loan) is applied at Step 6 of the calculation in section 23 of ITA 2007.