Income Tax (Trading and Other Income) Act 2005 section 810

Share of fixed amount: income period not a year

Section 810 deals with how to reduce the foster care fixed amount when a carer's qualifying care period in a tax year is shorter than a full year.

• The section applies whenever a foster carer's income period for qualifying care receipts is something other than a complete year
• The fixed amount is scaled down proportionally using the formula: AS × D ÷ 365, where AS is the fixed amount (or the carer's share of it) and D is the number of days in the income period
• If more than one qualifying carer operates from the same residence, the calculation starts with the individual's share of the fixed amount as determined under section 809, rather than the full fixed amount
• The effect is that a carer who provides qualifying care for only part of the year receives a correspondingly reduced tax-free allowance