Income Tax (Trading and Other Income) Act 2005 section 828

Overlap profit

Section 828 ensures that overlap relief remains available when qualifying care activities (such as foster care) are carried on as a trade, even where the special foster-care relief rules are used to calculate profits.

• The section applies where trade profits or losses for a tax year are calculated under the qualifying care relief rules (sections 813, 816, 822 or 823)
• Overlap profit relief can still be deducted when calculating qualifying care profits, including where full relief treats those profits as nil — in which case the overlap deduction can create a loss
• New overlap profit can still arise where the alternative method of calculating qualifying care profits is used (sections 816 or 823), based on the profit figure after the qualifying care rules have been applied
• "Overlap profit" has the same meaning as in the basis period rules in Chapter 15 of Part 2 of the Act