2.—(1) In this Part—
“child” includes a person adopted in pursuance of adoption proceedings and a step-child but, except in paragraph 4, does not include a child who holds a statutory award, and except as otherwise provided by paragraph 5, “parent” shall be construed accordingly;
“financial year” means the period of 12 months for which the income of the student’s parent is computed for the purposes of the income tax legislation which applies to it;
“gross income” has the meaning assigned to it by paragraph 5;
“income of the student’s parent” means the taxable income of the parent from all sources computed as for the purposes of the Income tax Acts or as for the purposes of the income tax legislation of another member State of the European Community which applies to the parent’s income, or where the legislation of more than one member State applies in respect of the same period, as for the purposes of the legislation pursuant to which the board considers that the parent will pay the largest amount of tax in that period, except as otherwise provided by paragraph 5 or 6;
“residual income” means, subject to sub-paragraph (2), the balance of gross income remaining in any year after the deductions specified in paragraph 6 have been made.
(2) Where, in a case not falling within paragraph 5(3) or (4), the board is satisfied that the income of the parent in any financial year is as a result of some event beyond his control likely to be, and to continue after that year to be, not more than 85% of his income in the financial year preceding that year, it may, for the purpose of enabling the student to attend the course without hardship, ascertain the parental contribution for the year of his course in which that event occurred by taking as the residual income the average of the residual income for each of the financial years in which that year falls.
(3) Where the student’s parent satisfies the board that his income is wholly or mainly derived from the profits of a business or profession carried on by him, then if the board and the parent so agree any reference in this Part to a financial year shall be construed as a reference to a year ending with such date as appears to the board expedient having regard to the accounts kept in respect of that business or profession and the periods covered thereby.
(4) Where a parent is in receipt of any income which does not form part of his taxable income by reason only that—
(a)he is not resident, ordinarily resident or domiciled in the United Kingdom, or where the parent’s income is computed as for the purposes of the income tax legislation of another member State of the European Community, not so resident, ordinarily resident or domiciled in that member State;
(b)the income does not arise in the United Kingdom, or where the parent’s income is computed as for the purposes of the income tax legislation of another member State, does not arise in that member State; or
(c)the income arises from an office, service or employment, income from which is exempt from tax in pursuance of any legislation,
his income for the purposes of this Part shall be computed as though the income first mentioned in this sub-paragraph were part of his taxable income.
(5) Where the income of the student’s parent is computed as for the purposes of the income tax legislation of another member State—
(a)it shall be computed in the currency of that member State;
(b)the value of any deduction mentioned in paragraph 6(2) shall be the amount of that currency required to purchase the sterling value of the deduction; and
(c)the value of the sterling which the income of the student’s parent in that currency would purchase shall be determined, and shall constitute the income of the student’s parent for the purposes of this Part.
(6) The rate applied in determining the sterling value of another currency under paragraph (5) shall be the rate for the month in which the last day of the financial year in question falls as published by the Office for National Statistics in “Financial Statistics”.
3. A parental contribution ascertained in accordance with this Part shall be applicable in the case of every student except—
(a)an independent student; or
(b)a student in respect of whom the board is satisfied either—
(i)that his parents cannot be found; or
(ii)that it is not reasonably practicable to get in touch with them;
(c)a student who pursuant to an order of a competent court has been in the custody or care of or has been provided with accommodation by—
(i)a state authority or agency, national, regional or local;
(ii)a voluntary or charitable organisation; or
(iii)any person who is not the student’s parent
throughout the three months immediately preceding the first year of his course, or if he cannot satisfy that requirement and he attained the age of 18 before the first year of his course, throughout the three months immediately preceding his attaining that age; provided that—
(iv)where head (i) applies the student has not at any time in the said period of three months been allowed by the authority or agency to be under the charge and control of his parents,
(v)where head (ii) applies the student has not at any time in the said period in fact been under such charge and control,
(d)a student whose parents are residing outside the European Community where the board is satisfied either—
(i)that the assessment of a parental contribution would place those parents in jeopardy; or
(ii)that it would not be reasonably practicable for those parents to send any such contribution to the United Kingdom;
(e)where sub-paragraph (7) of paragraph 5 applies and the parent whom the board considered the more appropriate for the purposes of that sub-paragraph has died.
4.—(1) The parental contribution shall, subject to sub-paragraphs (2), (3) and (4) be—
(a)in any case in which the residual income is £16,945 or more but less than £21,660, £45 with the addition of £1 for every complete £13·00 by which it exceeds £16,945;
(b)in any case in which the residual income is £21,660 or more but less than £31,840, £407 with the addition of £1 for every complete £9·20 by which it exceeds £21,660; and
(c)in any case in which the residual income is £31,840 or more £1,513 with the addition of £1 for every complete £7·50 by which it exceeds £31,840,
reduced in each case, in respect of each child of the parent (other than the student) who is wholly or mainly dependant on him on the first day of the year for which the contribution falls to be ascertained, by £75; and in any case in which the residual income is less than £16,945 the parental contributions shall be nil.
(2) The amount or (where a contribution is ascertained in respect of more than one child of the parent) the aggregate amount of the parental contribution shall not exceed £6,125 in any case.
(3) For any year in which a statutory award is held by—
(a)more than one child of the parent;
(b)the parent; or
(c)the student’s step-parent,
the parental contribution for the student shall be such proportion of any contribution ascertained in accordance with this Part as the board (after consultation with any other board or local education authority in Great Britain concerned) considers just, provided that where a contribution is ascertained in respect of more than one child of the parent the aggregate amount of the contributions in respect of each shall not exceed the amount of the contributions that would be ascertained if only one child held an award.
5.—(1) For the purposes of this paragraph, “preceding financial year” means the financial year immediately preceding the year in respect of which the resources of the student fall to be assessed (“assessment year”) and “current financial year” means the financial year which includes the first day of the assessment year;
Provided that where references to a financial year fall to be construed in accordance with paragraph 2(3) as references to a year ending with the a date less than five months before the assessment year, “preceding financial year” shall mean the year ending with a date five or more months before the beginning of that assessment year and “current financial year” shall mean the year ending with a date within those five months.
(2) Subject to the provisions of this paragraph, “gross income” means the income of the student’s parent in the preceding financial year or, for the purpose of calculating residual income under paragraph 2(2), in a financial year there mentioned.
(3) Where the board is satisfied that the sterling value of the income of the student’s parent in the current financial year is likely to be not more than 85 per cent of the sterling value of his income for the preceding financial year, it may for the purpose of calculating the parental contribution ascertain the gross income by reference to the current financial year; and, in such case, sub-paragraph (2) shall have effect, in relation to the assessment year and, if the board so determines, any subsequent year, as if the reference therein to the preceding financial year were a reference to the current financial year.
(4) Where—
(a)one of the student’s parents dies either before or during the assessment year; and
(b)that parent’s income has been or would be taken into account for the purpose of determining the parental contribution,
the parental contribution shall—
(c)where the parent dies before the assessment year, be determined by reference to the income of the surviving parent; or
(d)where the parent dies during the assessment year, be the aggregate of—
(i)the appropriate proportion of the contribution determined by reference to the income of both parents, that is to say such proportion thereof as the part of the assessment year during which both parents were alive bears to the full year, subject to a maximum of the same proportion of the student’s maintenance requirements as determined in accordance with Schedule 6; and
(ii)the appropriate proportion of the contribution determined by reference to the income of the surviving parent, that is to say such proportion thereof as the part of the assessment year remaining after the parent dies bears to the full year, subject to a maximum of the same proportion of the student’s maintenance requirements as determined in accordance with Schedule 6.
(5) Without prejudice to sub-paragraph (6), where, in pursuance of any trust deed or other instrument or by virtue of any applicable legislation any income is applied by any person for or towards the maintenance, education or other benefit of the student or of any person dependent on the student’s parent, or payments made to his parent are required to be so applied, that income, or those payments, shall be treated as part of the gross income of the parent.
(6) Where any award such as is mentioned in paragraph 1(1)(b)(i) is made by reason of the parent’s employment to any member of his family or his household (whether the student or some other such member) who holds a statutory award then that award shall not be treated as part of the gross income of the parent.
(7) Where the parents do not ordinarily live together throughout the assessment year, the parental contribution shall be determined be reference to the income of whichever parent the board considers the more appropriate in the circumstances.
(8) Where the parents do not ordinarily live together for part only of the assessment year, the parental contribution shall be the aggregate of—
(a)the proportion, which the part of the assessment year for which the parents do not so live together bears to the full year, of the contribution determined in accordance with sub-paragraph (7) subject to a maximum of the same proportion of the student’s maintenance requirements as determined in accordance with Schedule 6; and
(b)the proportion, which the part of the assessment year for which the parents so live together bears to the full year, of the contribution determined without regard to sub-paragraph (7) subject to a maximum of the same proportion of the student’s maintenance requirements as determined in accordance with Schedule 6.
(9) Where the student has a parent and a step-parent, the parental contribution shall be ascertained by reference to the income of the parent.
6.—(1) For the purposes of determining the income of a student’s parent (and, accordingly, the parent’s gross income), in computing his taxable income as for the purposes of the Income Tax Acts or for the purposes of the income tax legislation of another member State of the European Community any deductions which fall to be made or exemptions which are permitted—
(a)by the way of personal reliefs provided for in Chapter I of Part VII of the Income and Corporation Taxes Act 1988, or where the parent’s income is computed as for the purposes of the income tax legislation of another member State, any comparable personal reliefs;
(b)in respect of any payment made by the parent under covenant;
(c)in pursuance of any legislation or rule of law with the effect that income which for the purposes of the law of the United Kingdom is subject to income tax, or would be subject to income tax but for the deductions or exemptions, is not subject to income tax; or
(d)without prejudice to the foregoing, of a kind mentioned in sub-paragraph (2),
shall not be made or permitted.
(2) For the purpose of determining a parent’s residual income there shall be deducted from his gross income—
(a)in respect of any person, other than a spouse, child or holder of a statutory award, dependent on the parent during the year for which the contribution falls to be ascertained, the amount by which £2,140 exceeds the income of that person in that year;
(b)the gross amount of any sums paid as interest (including interest on a mortgage) in respect of which relief is given under the Income Tax Acts in respect of a loan to the parent; or where the parent’s income is computed as for the purposes of the income tax legislation of another member State, the gross amount of any such sums in respect of which relief would be given if that legislation made provision equivalent to the Income Tax Acts;
(c)half of the gross amount of any premium payable under a policy of life insurance in respect of which relief is given under section 266 of the Income and Corporation Taxes Act 1988 (Life policy and certain other premiums) or where the parent’s income is computed as for the purposes of the income tax legislation of another member State, half of the gross amount of any such premium in respect of which relief would be given if that legislation made provision equivalent to the Income Tax Acts;
(d)the gross amount of any other premium or sum in respect of which relief is given under section 266, 273, 619 or 639 of that Act, or where the parent’s income is computed as for the purposes of the income tax legislation of another member State, the gross amount of any such premium in respect of which relief would be given if that legislation made provision equivalent to the Income Tax Acts;
(e)where the parents ordinarily live together and one of them is incapacitated, so much of the cost in wages of domestic assistance as does not exceed £1,680;
(f)where a parent whose marriage has terminated either is gainfully employed or is incapacitated, so much of the cost in wages of domestic assistance as does not exceed £1,680;
(g)in respect of additional expenditure incurred by reason of the fact that the parent lives in a place where the cost of living is higher than that cost in the United Kingdom, such sum (if any) as the board considers reasonable in all the circumstances;
(h)in the case of a parent who holds a statutory award, the amount by which the aggregate of his requirements for his ordinary maintenance (ascertained in accordance with Part I of Schedule 6) and £870 exceeds the sum payable in respect of maintenance in pursuance of that award;
(i)any payments made to the parent of the student pursuant to an order of a competent court for the benefit of a child who is not his child of whom he has custody or care or for whom he provides accommodation;
(j)any income not referred to in sub-paragraph 2(4) which is exempt from tax under the Income Tax Acts, or where the parent’s income is computed as for the purposes of the income tax legislation of another member State, any income not referred to in sub-paragraph 2(4) which would be exempt from tax under that legislation if it made provision equivalent to those Acts.
(3) In any case where income is computed as for the purposes of the Income Tax Acts by virtue of paragraph 2(4), there shall be deducted from the parent’s gross income sums equivalent to the deductions mentioned in head (b), (c) or (d) of sub-paragraph (2), provided that any sums so deducted shall not exceed the deductions that would be made if the whole of the parent’s income were in fact taxable income for the purposes of the Income Tax Acts.