Calculation of parent’s residual income
5.—(1) For the purposes of determining the taxable income of an eligible student’s parent, any deductions which fall to be made or exemptions which are permitted—
(a)by way of personal reliefs provided for in Chapter 1 of Part VII of the Income and Corporation Taxes Act 1988 or, where the income is computed for the purposes of the income tax legislation of another Member State, any comparable personal reliefs;
(b)pursuant to any enactment or rule of law under which payments which would otherwise under United Kingdom law form part of a person’s income are not treated as such; or
(c)under sub-paragraph (2).
are not made or permitted.
(2) For the purposes of determining the residual income of an eligible student’s parent, there shall be deducted from the taxable income determined under sub-paragraph (1) the aggregate of any amounts falling within any of the following sub-paragraphs—
(a)the gross amount of any premium or sum relating to a pension (not being a premium payable under a policy of life assurance) in respect of which relief is given under section 273, 619 or 639 of the Income and Corporation Taxes Act 1988, or where the income is computed 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;
(b)in any case where income is computed for the purposes of the Income Tax Acts by virtue of sub-paragraph (6) any sums equivalent to the deduction mentioned in sub-paragraph (a), provided that any sums so deducted do not exceed the deductions which would be made if the whole of the eligible student’s parent’s income were in fact income for the purposes of the Income Tax Acts;
(c)in the case of a parent student or an eligible student’s parent who holds a statutory award, £1,050.
(3) Where the National Assembly is satisfied that the income of the parent in the financial year beginning immediately before the relevant year (“the current financial year”) is, as a result of some event beyond his or her control, likely to be not more than 85 per cent. of the sterling value of his or her income in the preceding financial year it may, for the purpose of enabling the eligible student to attend the course without hardship, ascertain the household income for the current financial year.
(4) Where the National Assembly is satisfied that the income of the parent in any financial year is, as a result of some event beyond his or her control, likely to be and to continue after that year to be not more than 85 per cent. of the sterling value of his or her income in the previous financial year it may, for the purpose of enabling the eligible student to attend the course without hardship, ascertain the household income for the academic year of the eligible student’s course in which that event occurred by taking as the residual income of the parent the average of his or her residual income for each of the financial years in which that academic year falls.
(5) Where the eligible student’s parent satisfies the National Assembly that his or her income is wholly or mainly derived from the profits of a business or profession carried on by him or her, then any reference in this Schedule to a preceding financial year means the earliest period of twelve months which ends after the start of the preceding financial year and in respect of which accounts are kept relating to that business or profession.
(6) Where an eligible student’s parent is in receipt of any income which does not form part of his or her income for the purposes of the Income Tax Acts or the income tax legislation of another Member State by reason only that—
(a)he or she is not resident, ordinarily resident or domiciled in the United Kingdom, or where his or her income is computed as for the purposes of the income tax legislation of another Member State, 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 or her taxable income for the purposes of this Schedule is computed as though the income under this sub-paragraph were part of his or her income for the purposes of the Income Tax Acts or the income tax legislation of another Member State, as the case may be.
(7) Where the income of the eligible student’s parent is computed as for the purposes of the income tax legislation of another Member State, it is computed under the provisions of this Schedule in the currency of that Member State and the income of the eligible student’s parent for the purposes of this Schedule is the sterling value of that income determined in accordance with 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.
(8) Where one of the eligible student’s parents dies either before or during the relevant year and that parent’s income has been or would be taken into account for the purpose of determining the household income, the household income is —
(a)where the parent dies before the relevant year, determined by reference to the income of the surviving parent; or
(b)where the parent dies during the relevant year, the aggregate of—
(i)the appropriate proportion of the household income determined by reference to the income of both parents, being the proportion in respect of that part of the relevant year during which both parents were alive; and
(ii)the appropriate proportion of the household income determined by reference to the income of the surviving parent, being the proportion in respect of that part of the relevant year remaining after the death of the other parent.
(9) Where the National Assembly determines that the parents do not ordinarily live together throughout the relevant year, the household income is determined by reference to the income of whichever parent the National Assembly considers the more appropriate under the circumstances.
(10) Where the National Assembly determines that the parents do not ordinarily live together for part only of the relevant year, the household income is determined by reference to the aggregate of—
(a)the appropriate proportion of the household income determined in accordance with sub-paragraph (9), being the proportion in respect of that part of the relevant year for which the parents do not so live together; and
(b)the appropriate proportion of the household income determined otherwise in respect of the remainder of the relevant year.