Income Tax (Trading and Other Income) Act 2005 section 746

Payments to adopters, etc: Northern Ireland

Section 746 exempts from income tax certain payments made in Northern Ireland to people who have adopted or intend to adopt a child, and certain payments made to people who hold a residence order in respect of a child.

• Payments authorised by the court, payments by registered adoption societies, and permitted allowances under the Adoption (Northern Ireland) Order 1987 to adopters or prospective adopters are exempt from income tax.
• Payments under the Children (Northern Ireland) Order 1995 to a person who holds a residence order for a child — including local authority contributions to a child's maintenance, orders for financial relief, and maintenance agreements — are also exempt.
• The exemption for residence order holders does not apply if the payment is made to an "excluded relative" of the child, or if the residence order is also held by an excluded relative — meaning a parent of the child, or someone who is or has been married to, or in a civil partnership with, a parent of the child.
• The exemption ensures that genuine adoptive and foster-type carers in Northern Ireland are not taxed on financial support they receive in connection with looking after a child, while preventing the relief from applying where the carer is effectively the child's own parent or the partner of a parent.