Income Tax (Trading and Other Income) Act 2005 section 845G

Foreign income relief ignored for purposes of determining adjusted net income

Section 845G requires that any relief claimed under the foreign income provisions is disregarded when calculating an individual's adjusted net income for a tax year.

• This section applies where an individual has made a foreign income claim for a tax year.
• When determining adjusted net income (as defined in section 58 of ITA 2007), the foreign income relief must be added back.
• In effect, adjusted net income is calculated as though the foreign income relief had never been deducted from net income.
• This prevents foreign income relief from artificially reducing adjusted net income, which is used to determine entitlement to various allowances and thresholds.

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