What conditions must be met for full qualifying care relief under section 812 of ITTOIA 2005?

Three conditions must be satisfied: the individual must qualify for qualifying care relief for the tax year, their total qualifying care receipts must not exceed their individual limit for that year, and the special provisions for trades with an accounting date other than 5 April must not apply. When all conditions are met, qualifying care income is exempt from tax.

Does an individual still qualify for full foster-care relief if their qualifying care receipts exactly equal their individual limit?

Yes. Under section 812 of ITTOIA 2005, receipts that exactly equal the individual's limit still fall within the scope of full qualifying care relief. The threshold is only breached when receipts exceed the limit. Therefore, an individual whose receipts match their limit precisely remains entitled to full relief and pays no income tax on that care income.

What happens if qualifying care receipts exceed the individual limit under section 812?

If qualifying care receipts exceed the individual's limit for the tax year, full qualifying care relief under section 812 is not available. However, a partial form of relief may apply instead, calculated under separate subsequent provisions of ITTOIA 2005. The individual would need to follow those alternative rules to determine the reduced amount of relief available.

What is the effect of full qualifying care relief when all section 812 conditions are satisfied?

When all three conditions are satisfied, the individual's qualifying care income is effectively exempt from income tax entirely. This applies whether the income arises as trading income or as miscellaneous income. The detailed mechanics of the exemption for each income type are set out in subsequent provisions of the Act.

Income Tax (Trading and Other Income) Act 2005 section 812

Full foster-care relief: introduction

Section 812 sets out the conditions that must be met for an individual to receive the full form of qualifying care relief, where their qualifying care receipts fall within their annual limit.

The individual must qualify for qualifying care relief for the relevant tax year.
Total qualifying care receipts for the tax year must not exceed the individual's limit for that year (receipts exactly equal to the limit still qualify for full relief).
The special rules for trades with an accounting date other than 5 April must not apply.
Where all conditions are met, the full relief provisions exempt the qualifying care income from tax entirely.

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