783BM 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 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 a property business, and
(c) condition A or B is met.
(2) 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 783BQ), and
(b) an election by the individual under section 799 has effect to disapply full rent-a-room relief for the tax year.
(3) 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 property 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 property 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.
783BP 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 property 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 provides relief on income from the use of furnished accommodation in an individual's only or main residence.
The relief is referred to in this Chapter as “rent-a-room relief”.
(2) The form of relief depends on whether the individual's total rent-a-room amount exceeds the individual's limit (see sections 788 to 790).
(3) If it does not, the income is not charged to income tax unless the individual elects otherwise (see sections 791 to 794).
(4) If it does, the individual may elect for alternative methods of calculating the income (see sections 795 to 798).
(1) An individual qualifies for rent-a-room relief for a tax year if the individual—
(a) has rent-a-room receipts for the tax year (see section 786), and
(b) does not derive any taxable income other than rent-a-room receipts from a relevant trade, letting or agreement.
(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, letting or agreement is one from which the individual derives rent-a-room receipts for the tax year.
(1) For the purposes of this Chapter an individual has rent-a-room receipts for a tax year if—
(a) the receipts are in respect of the use of furnished accommodation in a residence in the United Kingdom or in respect of goods or services supplied in connection with that use,
(b) they accrue to the individual during the income period for those receipts (see subsection (4)),
(c) for some or all of that period the residence is the individual's only or main residence, and
(d) the receipts would otherwise be brought into account in calculating the profits of a trade or UK property business or chargeable to income tax under Chapter 8 of Part 5 (income not otherwise charged).
(2) Meals, cleaning and laundry are examples of goods or services supplied in connection with the use of furnished accommodation in a residence.
(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(4) ... the income period is the period which—
(a) begins at the beginning of the tax year or, if later, the beginning of the letting in respect of which the receipts arise, and
(b) ends at the end of the tax year or, if earlier, the end of that letting.
(5) Subsections (6) and (7) apply if—
(a) the receipts would otherwise be brought into account in calculating the profits of a trade, and
(b) the profits of the trade are required under section 24A to be calculated on the cash basis.
(6) Any amounts brought into account under section 96A (capital receipts under, or after leaving, cash basis) as a receipt in calculating the profits of the trade are to be treated as receipts within paragraph (a) of subsection (1) above.
(6A) Subsections (6B) and (7) apply if—
(a) the receipts would otherwise be brought into account in calculating the profits of a UK property business, and
(b) the profits are calculated on the cash basis (see section 271D).
(6B) Any amounts brought into account under section 307E (capital receipts under, or after leaving, cash basis) as a receipt in calculating the profits of the property business are to be treated as receipts within paragraph (a) of subsection (1) above.
(7) The reference in subsection (1)(b) to receipts that accrue to an individual during the income period for those receipts is to be read as a reference to receipts that are received by the individual during that period.
(1) In this Chapter “residence” means—
(a) a building, or part of a building, occupied or intended to be occupied as a separate residence, or
(b) a caravan or houseboat.
(2) If a building, or part of a building, designed for permanent use as a single residence is temporarily divided into two or more separate residences, it is still treated as a single residence.
(1) For the purposes of this Chapter an individual's “total rent-a-room amount” for a tax year is the total of—
(a) the individual's rent-a-room receipts for the tax year, and
(b) any relevant balancing charges for the tax year (see section 802).
(2) In calculating the total rent-a-room amount, no deduction is allowed for expenses or any other matter.
(1) For the purposes of this Chapter an individual's limit for a tax year depends on whether the individual meets the exclusive receipts condition for the tax year (see section 790).
(2) If the individual does, the individual's limit for the tax year is the basic amount for the tax year.
(3) If the individual does not, the individual's limit for the tax year is half that amount.
(4) The basic amount for a tax year is £7500 .
(5) The Treasury may by order amend the sum for the time being specified in subsection (4).
(1) An individual meets the exclusive receipts condition for a tax year if, for each rent-a-room residence of the individual, no receipts accrue to any other person during any relevant period in respect of—
(a) the use of residential accommodation (whether furnished or not) in the residence, or
(b) goods or services supplied in connection with that use (such as meals, cleaning or laundry),
at a time when the residence is the individual's only or main residence.
(2) Each of the following periods is a relevant period—
(a) any income period specified in section 786 for any rent-a-room receipts of the individual for the tax year,
(b) the period of 12 months which begins at the same time as any such income period begins, and
(c) the period of 12 months which ends at the same time as any such income period ends.
(3) A “rent-a-room residence of the individual” means a residence in respect of which the individual derives rent-a-room receipts for the tax year.
Sections 792 to 794 (which give the full form of rent-a-room relief) apply if—
(a) an individual qualifies for rent-a-room relief for a tax year,
(b) the individual's total rent-a-room amount for the tax year does not exceed the individual's limit for the tax year, and
(c) no election by the individual under section 799 has effect to disapply the full relief for the tax year.
(1) This section applies if the individual has any rent-a-room receipts for the tax year which would otherwise be brought into account in calculating the profits of a trade.
(2) The profits or losses of the trade for the tax year are treated as nil.
(1) This section applies if the individual has any rent-a-room receipts for the tax year which would otherwise be brought into account in calculating the profits of a UK property business.
(2) In calculating those profits—
(a) those receipts for the tax year, and
(b) any expenses associated with them,
are not brought into account.
(3) No relevant balancing charge or relevant allowance (see section 802) is made in calculating those profits for the tax year.
794 Full rent-a-room relief: income chargeable under Chapter 8 of Part 5
(1) This section applies if the individual has any rent-a-room receipts for the tax year which would otherwise be chargeable to income tax under Chapter 8 of Part 5 (income not otherwise charged).
(2) For each agreement from which those receipts arise, the amount of—
(a) those receipts arising in the tax year from the agreement, less
(b) any expenses associated with them,
is treated as nil.
795 Alternative calculation of profits: introduction
Sections 796 to 798 (which provide for alternative methods of calculating profits) apply if—
(a) an individual qualifies for rent-a-room relief for a tax year,
(b) the individual's total rent-a-room amount for the tax year exceeds the individual's limit for the tax year, and
(c) an election by the individual under section 800 has effect to apply the alternative method of calculating profits for the tax year.
796 Alternative calculation of profits: trading income
(1) This section applies if the individual has any rent-a-room receipts for the tax year which are the receipts of a trade.
(2) The profits of the trade for the tax year are—
(a) the sum of the amount of the rent-a-room receipts for the tax year arising from the trade and the amount of any relevant balancing charge, less
(b) the deductible amount.
(3) The deductible amount—
(a) is L if all the individual's rent-a-room receipts for the tax year arise from the trade, and
(b) otherwise, is—
L
×
T
R
but, in either case, subject to a maximum of T.
(4) In subsection (3)—
L is the individual's limit for the tax year,
T is the individual's rent-a-room receipts for the tax year arising from the trade, and
R is all the individual's rent-a-room receipts for the tax year.
(5) In calculating the amount of any rent-a-room receipts for the purposes of this section, no deduction is allowed for expenses or any other matter.
797 Alternative calculation of profits: property income
(1) This section applies if the individual has any rent-a-room receipts for the tax year (“Part 3 rent-a-room receipts”) which are to be brought into account in calculating the profits of a UK property business.
(2) In calculating those profits for the tax year—
(a) the Part 3 rent-a-room receipts for the tax year are brought into account only in calculating the profits of the business for the tax year, and
(b) any expenses associated with those receipts are not brought into account.
(3) In calculating those profits for the tax year—
(a) a deduction is allowed, and
(b) no relevant allowance, but any relevant balancing charge, is made.
(4) The amount of the deduction—
(a) is L if all the individual's rent-a-room receipts for the tax year are Part 3 rent-a-room receipts, and
(b) otherwise, is—
L
×
P
R
but, in either case, subject to a maximum of P.
(5) In subsection (4)—
L is the individual's limit for the tax year,
P is the individual's Part 3 rent-a-room receipts for the tax year, and
R is all the individual's rent-a-room receipts for the tax year.
798 Alternative calculation of profits: income chargeable under Chapter 8 of Part 5
(1) This section applies if the individual has any rent-a-room receipts for the tax year which are chargeable to income tax under Chapter 8 of Part 5 (income not otherwise charged).
(2) The amount charged for the tax year arising from all the agreements from which the receipts are derived is—
(a) the amount of the receipts for the tax year so arising, less
(b) the deductible amount.
(3) The deductible amount is—
L
×
I
R
subject to a maximum of I.
(4) In subsection (3)—
L is the individual's limit for the tax year,
I is the amount of the receipts for the tax year arising from the agreements, and
R is all the individual's rent-a-room receipts for the tax year.
(5) In calculating the amount of any rent-a-room receipts for the purposes of this section, no deduction is allowed for expenses or any other matter.
(1) An individual may elect for sections 792 to 794 (full relief) not to apply.
(2) The election—
(a) must specify the tax year for which it is made, and
(b) has effect for that year (unless withdrawn by notice given by the individual).
(3) An election or notice of withdrawal must be made or given to the Inland Revenue on or before—
(a) the first anniversary of the normal self-assessment filing date for the tax year for which the election is made, or
(b) such later date as the Inland Revenue may, in a particular case, allow.
800 Election for alternative methodof calculating profits
(1) An individual may elect for the alternative method of calculating profits given in sections 796 to 798 to apply if—
(a) the individual qualifies for rent-a-room relief for a tax year, and
(b) the individual's total rent-a-room amount for the tax year exceeds the individual's limit for the tax year.
(2) The election—
(a) must specify the tax year for which it is made, and
(b) has effect for that year and subsequent tax years (unless withdrawn by notice given by the individual).
(3) A notice of withdrawal of an election must specify the tax year for which it is given.
The election ceases to have effect for that tax year and subsequent tax years.
(4) Withdrawal of an election does not prevent a fresh election from being made for a subsequent tax year.
(5) An election or notice of withdrawal must be made or given to the Inland Revenue on or before—
(a) the first anniversary of the normal self-assessment filing date for the tax year specified in the election or notice of withdrawal, or
(b) such later date as the Inland Revenue may, in a particular case, allow.
(6) If—
(a) an election would otherwise have effect for a tax year, but
(b) the individual's total rent-a-room amount for the tax year does not exceed the individual's limit for the tax year,
the individual is treated as giving a notice of withdrawal of the election which specifies that tax year as the one for which it is given (and the election, therefore, ceases to have effect for that tax year and subsequent tax years).
(1) This section applies if it is necessary to make an adjustment by way of assessment to give effect to an election or notice of withdrawal under section 799 or 800.
(2) The assessment is not out of time if it is made on or before the first anniversary of the normal self-assessment filing date for the tax year for which the election was made or notice was given (or treated as given).
In this Chapter—
“letting” includes a licence to occupy,
“relevant allowance”, for a tax year, means a capital allowance falling to be made for the tax year under Part 2 of CAA 2001 in respect of plant or machinery provided for the purposes of a trade or letting from which rent-a-room receipts are derived, and
“relevant balancing charge”, for a tax year, means a balancing charge falling to be made for the tax year under Part 2 of CAA 2001 in respect of plant or machinery provided for the purposes of a trade or letting from which rent-a-room receipts are derived.
(1) This Chapter provides relief on income from the provision by an individual of qualifying care.
The relief is referred to in this Chapter as “qualifying care relief”.
(2) The form of relief depends on whether the individual's total qualifying 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 qualifying 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.
(1) An individual qualifies for qualifying care relief for a tax year if the individual—
(a) has qualifying care receipts for the tax year (see section 805), and
(b) does not derive any taxable income, other than qualifying 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 qualifying care receipts for the tax year.
(4) Subsection (1) is subject to section 804A.
804A Shared lives care: further condition for relief
(1) This section applies if an individual (“N”) has qualifying care receipts for a tax year in respect of the provision of shared lives care.
(2) N does not qualify for qualifying care relief in respect of those receipts if the placement cap is exceeded for the residence (or any of the residences) used by N to provide the care from which those receipts are derived.
(3) The placement cap is exceeded for a residence if, at any given time during the relevant period, shared lives care is being provided there (whether by N or anyone else) for more than 3 people in total.
(4) The relevant period, in relation to a residence, is the period for which the residence is N's only or main residence during the income period for the receipts (see section 805).
(5) If the placement cap is so exceeded but N also has qualifying care receipts for the tax year in respect of the provision of foster care, this Chapter is to apply to N for the tax year as if—
(a) references to qualifying care were to foster care, and
(b) accordingly, references (other than in this section) to qualifying care receipts did not include receipts in respect of the provision of shared lives care.
(6) In determining the number of people for whom shared lives care is being provided at any given time, brothers and sisters (including half-brothers and half-sisters) count as one person.
(1) For the purposes of this Chapter an individual has qualifying care receipts for a tax year if —
(a) the receipts are in respect of the provision of qualifying care,
(b) they accrue to the individual during the income period for those receipts (see subsection (3)), and
(c) the receipts would otherwise be brought into account in calculating the profits of a trade or chargeable to income tax under Chapter 8 of Part 5 (income not otherwise charged).
(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(3) ... the income period is the tax year.
(4) Subsections (5) and (6) apply if—
(a) the receipts would otherwise be brought into account in calculating the profits of a trade, and
(b) the profits of the trade are required under section 24A to be calculated on the cash basis.
(5) Any amounts brought into account under section 96A (capital receipts under, or after leaving, cash basis) as a receipt in calculating the profits of the trade are to be treated as receipts within paragraph (a) of subsection (1) above.
(6) The reference in subsection (1)(b) to receipts that accrue to an individual during the income period for those receipts is to be read as a reference to receipts that are received by the individual during that period.
For the purposes of this Chapter qualifying care is provided if an individual (alone or in partnership) provides—
(a) foster care but not shared lives care,
(b) shared lives care but not foster care, or
(c) both foster care and shared lives care.
(1) For the purposes of this Chapter foster care is provided if an individual—
(a) provides accommodation and maintenance for a child, and
(b) does so as a foster carer.
(2) An individual is a foster carer if the child is placed with the individual by virtue of a compulsory supervision order or interim compulsory supervision order, or under any of the following enactments, unless the individual is excluded by subsection (5).
(3) The enactments are—
(a) section 22C or 59(1)(a) of the Children Act 1989 (c. 41) (provision of accommodation for children by local authorities or voluntary organisations),
(aa) section 81 of the Social Services and Well-being (Wales) Act 2014 (provision of accommodation for children by local authorities).
(b) regulations under section 5 of the Social Work (Scotland) Act 1968 (c. 49),
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(d) Article 27(2)(a) or 75(1)(a) of the Children (Northern Ireland) Order 1995 (S.I. 1995/755 (N.I. 2)) (provision of accommodation for children by authorities or voluntary organisations).
(4) An individual is also a foster carer if the individual is approved as a foster carer by a local authority or a voluntary organisation in accordance with regulations under section 5 of the Social Work (Scotland) Act 1968, and the child in respect of whom the accommodation is provided—
(a) is being looked after by a local authority within the meaning of section 17(6) of the Children (Scotland) Act 1995, or
(b) is subject to an order or warrant made by the children’s hearing or sheriff under the Children’s Hearings (Scotland) Act 2011,
unless the individual is excluded by subsection (5).
(5) The following are excluded individuals—
(a) a parent of the child,
(b) an individual who is not a parent of the child but who has parental responsibility (or, in Scotland, parental responsibilities) in relation to the child,
(ba) where the child is in care and there was a child arrangements order in force with respect to the child immediately before the care order was made, a person named in the child arrangements order as a person with whom the child was to live,
(bb) (in Scotland) where the child is in care and there was a child arrangements order in force with respect to the child immediately before the child was placed in care, a person named in the child arrangements order as a person with whom the child was to live, spend time or otherwise have contact,
(c) if the child is in care and there was a residence order in force with respect to the child immediately before the care order was made, an individual in whose favour the residence order was made, ...
(d) (in Scotland) if the child is in care and there was a residence order or contact order in force with respect to the child immediately before the child was placed in care, an individual in whose favour the residence order or contact order was made.; and
(e) an individual with whom the child is placed under a placement falling within section 22C(6)(d) of the Children Act 1989.
(f) an individual with whom the child is placed under a placement falling within section 81(6)(d) of the Social Services and Well-being (Wales) Act 2014.
(6) In this section—
“compulsory supervision order” has the meaning given by section 83 of the Children’s Hearings (Scotland) Act 2011; and
“interim compulsory supervision order” has the meaning given by section 86 of that Act.
(1) For the purposes of this Chapter shared lives care is provided by an individual if—
(a) the individual provides accommodation and care for an adult or child (“X”) who has been placed with the individual, and
(b) the conditions in subsection (2) are met.
(2) The conditions are—
(a) the accommodation is in the individual's own home,
(b) the accommodation and care are provided on the basis that X will share the individual's home and daily family life during the placement,
(c) the placement is made under a specified social care scheme,
(d) the individual does not provide the accommodation and care as a foster carer, and
(e) the individual is not excluded within the meaning of section 806(5).
(3) Section 806(5) has effect for the purposes of subsection (2)(e) as if references to the child were to X (whatever X's age).
(4) “Specified social care scheme” means a social care scheme of a kind specified or described in an order made by the Treasury.
(5) An order under subsection (4) may make provision having effect in relation to the tax year current on the day on which the order is made.
(6) In this section—
“care” means personal care, including assistance and support;
“home” means an individual's only or main residence;
“social care scheme” means a scheme, service or arrangement for those who, by reason of age, illness, disability or other vulnerability, are in need of care.
(1) In this Chapter “residence” means—
(a) a building, or part of a building, occupied or intended to be occupied as a separate residence, or
(b) a caravan or houseboat.
(2) If a building, or part of a building, designed for permanent use as a single residence is temporarily divided into two or more separate residences, it is still treated as a single residence.
807 Calculation of “total qualifying care receipts”
For the purposes of this Chapter, in calculating an individual's “total qualifying care receipts” for a tax year, no deduction is allowed for expenses or any other matter.
(1) For the purposes of this Chapter an individual's limit for a tax year is the total of—
(a) the fixed amount for the tax year or, if section 809 or 810 applies, the individual's share of that amount, and
(b) each amount per adult or child for the individual for the tax year (see section 811).
(2) For the purposes of this Chapter the fixed amount for a tax year is £20,440.
(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
809 Share of fixed amount: residence used by more than one carer
(1) This section applies if in a tax year—
(a) the residence used to provide the qualifying care from which an individual's qualifying care receipts for the tax year are derived is also used by another individual to provide qualifying care, and
(b) the other individual also has qualifying care receipts for the tax year.
(2) Each individual's share of the fixed amount for the tax year is the fixed amount divided by the total number of individuals who—
(a) use the residence in the tax year to provide qualifying care, and
(b) have qualifying care receipts for the tax year.
810 Share of fixed amount: income period not a year
(1) This section applies if in a tax year an individual's income period for the individual's qualifying care receipts is a period other than a year.
(2) The individual's share of the fixed amount for the tax year is—
AS
×
D
365
where—
AS is the fixed amount or (if section 809 applies) the individual's share of the fixed amount, and
D is the number of days in the individual's income period.
(1) An individual's amount per adult or child for a tax year is found by multiplying—
(a) the number of weeks during the income period for the tax year in which the individual provides qualifying care for the adult or child, by
(b) the weekly amount for the adult or child.
(1A) The weekly amount for an adult is £515.
(2) The weekly amount for a child is—
(a) £435 for a week throughout which the child is under 11 years old, and
(b) £515 for other weeks.
(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(4) If an individual provides qualifying care for an adult or child during an income period for only part of a week, the part is treated as a whole week.
(5) If an income period begins or ends during a week, the week is treated as falling within the income period ending during the week.
But if there is no such income period, the week is treated as falling within the income period beginning during the week.
(6) A week is a period of 7 days beginning with a Monday.
Sections 813 and 814 (which give the full form of qualifying care relief) apply if—
(a) an individual qualifies for qualifying care relief for a tax year,
(b) the individual's total qualifying care receipts for the tax year do not exceed the individual's limit for the tax year, and
(c) sections 822 and 823 do not apply (accounting date for trade not 5 April).
(1) This section applies if the individual's qualifying care receipts for the tax year would otherwise be brought into account in calculating the profits of a trade.
(2) The profits or losses of the trade for the tax year are treated as nil.
814 Full qualifying care relief: income chargeable under Chapter 8 of Part 5
(1) This section applies if the individual's qualifying care receipts for the tax year would otherwise be chargeable to income tax under Chapter 8 of Part 5 (income not otherwise charged).
(2) For each arrangement from which those receipts arise, the amount of—
(a) those receipts arising in the tax year from the arrangement, less
(b) any expenses associated with them,
is treated as nil.