Income Tax (Trading and Other Income) Act 2005 section 803

Overview of Chapter 2

Section 803 provides an overview of the qualifying care relief regime, which offers income tax relief to individuals who receive income from providing qualifying care (such as foster care).

• Qualifying care relief exempts care income from income tax entirely where the individual's total qualifying care receipts do not exceed their personal limit
• Where receipts exceed the individual's limit, the carer may elect to use an alternative method of calculating taxable profits, broadly by deducting the limit amount instead of actual expenses
• Special rules apply where qualifying care receipts form part of a trade whose accounting period does not end on 5 April, and in relation to capital allowances
• The relief provisions that apply to trades also extend to professions and vocations