Income Tax Act 2007 section 448

Relief for individuals

Section 448 provides income tax relief for individuals who make certain annual payments or patent royalty payments from which income tax must be deducted at source, where those payments cannot be set against any source of income.

• An individual who makes a commercial annual payment or patent royalty from which income tax must be deducted at source can claim relief equal to the gross amount of that payment.
• The payment must not be deductible in calculating the individual's income from any source — it applies only to payments that cannot be offset elsewhere.
• Total relief in any tax year is capped at the individual's modified net income for that year, which excludes certain types of non-qualifying income.
• The relief works by reducing the individual's net income at Step 2 of the main income tax calculation, effectively lowering the amount on which tax is charged.