Income Tax (Trading and Other Income) Act 2005 section 783AJ

Partial relief: alternative calculation of chargeable miscellaneous income

Section 783AJ provides that, where an individual qualifies for partial relief and has miscellaneous income, the trading allowance is deducted from that miscellaneous income instead of deducting actual expenses.

• This alternative calculation applies when an individual qualifies for partial relief and their relevant income includes miscellaneous income
• The chargeable amount of miscellaneous income is the total miscellaneous income for the year minus the deductible amount
• The deductible amount is normally equal to the individual's trading allowance for the tax year
• Where the trading allowance needs to be split (as provided for in section 783AK), the deductible amount may differ from the full trading allowance