New section 213D Relevant Income
12.New section 213D(1) sets out how to calculate the individual’s “relevant income” for the tax year. The amount of relevant income is:
the total income of the individual for the tax year (Step 1);
plus any pension contributions and donations under payroll giving paid by the individual in respect of which there was a deduction in determining total income at Step 1 above (Step 2);
less any income tax deductions and reliefs, other than for pension contributions and gifts of qualifying investments to charity, that are deductible at Step 2 of the calculation of income tax liability in section 24 of ITA (Step 3);
plus taxable employment income that the individual has agreed to give up under a salary sacrifice or flexible remuneration arrangement made on or after 22 April 2009 (Step 4).
13.New section 213D(2) defines when a ‘relevant’ salary sacrifice or flexible remuneration arrangement made on or after 22 April 2009 exists, for the purposes of Step 4 of the relevant income calculation.
14.New section 213D(3) defines relevant pension provision (as used in the meanings of relevant salary sacrifice and flexible remuneration arrangements) by reference to pension contributions to a pension scheme in respect of the individual .
15.New section 213D(4) defines a connected person by reference to the definition in section 993 of ITA.
