Income Tax (Trading and Other Income) Act 2005 Explanatory Notes

Section 803: Overview of Chapter 2

2990.This section introduces the relief. It is based on paragraph 1 of Schedule 36 to FA 2003.

2991.Subsection (2) introduces the key factor in determining the form of relief available: the level of gross foster-care receipts, that is receipts before any deductions for expenses.

2992.Subsection (3) introduces the full form of the relief where gross receipts are modest: they are simply not charged to tax.

2993.Subsection (4) introduces the alternative method of calculation form of the relief where gross receipts are larger.

2994.Not all taxpayers prepare accounts to 5 April. Subsection (5) alerts the reader to the fact that special rules apply in that case.

2995.The nature of the activity requires a rather different approach to capital allowances than that in rent-a-room. Subsection (5)(b) introduces the special provisions.

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