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Finance Bill
Schedule 36 — Foster carers
Part 2 — The exemption and the alternative methods of calculation

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          (3)      Subject to sub-paragraphs (5) and (6), an election under this paragraph must

be made on or before the election deadline for the year of assessment to

which it relates.

          (4)      The election deadline for a year of assessment is—

              (a)             the first anniversary of the 31st January next following that year of

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assessment, or

              (b)             such later date as the Board may in any particular case allow.

          (5)      If—

              (a)             an individual does not make an election under this paragraph for a

year of assessment on or before the election deadline for that year,

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and

              (b)             an adjustment is made after that deadline to the profits from his

provision of foster care on which he is chargeable to tax for that year,

                   the individual may make an election under this paragraph for the year on or

before the date specified in sub-paragraph (6).

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          (6)      That date is—

              (a)             the first anniversary of the 31st January next following the year of

assessment in which the adjustment is made, or

              (b)             such later date as the Board may in any particular case allow.

          (7)      Any election under this paragraph must be made in writing to an officer of

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the Board.

Periods of account ending otherwise than on 5th April

  15      (1)      This paragraph applies to an individual for a year of assessment for which—

              (a)             the individual qualifies for relief under this Schedule,

              (b)             his foster care receipts are the receipts of a trade, profession or

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vocation, and

              (c)             the period of account in which his foster care receipts accrue ends on

a day other than 5th April in that year of assessment.

          (2)      If the individual’s total foster care receipts for the period of account do not

exceed the relevant limit for that period (see sub-paragraph (6) or (8)) the

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profits or losses from his trade, profession or vocation for the year of

assessment are to be treated as nil.

          (3)      If, in a case falling within sub-paragraph (2), the individual would, apart

from that sub-paragraph, be entitled to a deduction for the year under

section 63A(1) or (3) of the Taxes Act 1988 (overlap profits and overlap

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losses), the individual is entitled to that deduction notwithstanding that sub-

paragraph.

          (4)      Sub-paragraph (5) applies where—

              (a)             the individual’s total foster care receipts for the period of account

exceed the relevant limit for that period, and

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              (b)             an election by him under paragraph 14 has effect.

          (5)      The profits of the year of assessment of the trade, profession or vocation

from which the individual’s foster care receipts arise are—

              (a)             the amount of the foster care receipts arising from the trade,

profession or vocation for the period of account, less

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              (b)             the relevant limit for that period.

 

 

Finance Bill
Schedule 36 — Foster carers
Part 3 — Capital allowances

    423

 

          (6)      If the period of account in which the individual’s foster care receipts accrue

ends in the year 2003-04, “the relevant limit” for that period is found by

aggregating—

              (a)             the individual’s share of the fixed amount for the year 2003-04

(found in accordance with paragraph 7), and

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              (b)             each amount per child for that individual for that period of account.

          (7)      For the purposes of sub-paragraph (6), an individual’s amount per child for

the period of account is each amount that would be his amount per child by

virtue of paragraph 8 for the year 2003-04 if that period of account were the

income period for that year.

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          (8)      If the period of account in which the individual’s foster care receipts accrue

ends in a year subsequent to the year 2003-04, “the relevant limit” for that

period is found by aggregating—

              (a)             the individual’s share of the fixed amount for the year in which the

period of account ends (found in accordance with paragraph 7), and

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              (b)             for each of the years of assessment in which the period of account

falls, each amount per child for that individual for each part of that

period of account which falls within that year of assessment.

          (9)      For the purposes of sub-paragraph (8), an individual’s amount per child for

a part of a period of account is each amount that would be his amount per

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child by virtue of paragraph 8 for the year of assessment in which the part of

that period falls if that part of the period of account were the income period

for that year.

Part 3

Capital allowances

25

Introductory

  16      (1)      Paragraphs 17 to 19 make provision for the application of the Capital

Allowances Act 2001 (c. 2) (“CAA 2001”) in relation to—

              (a)             a relevant individual, and

              (b)             a relevant chargeable period of that individual.

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          (2)      For this purpose, a “relevant individual” is an individual who, in a year of

assessment, satisfies the conditions in sub-paragraphs (3) and (4).

          (3)      The first condition is that in the year of assessment the individual would,

apart from this Schedule, have foster care receipts chargeable—

              (a)             under Case I or II of Schedule D as the profits of a trade, profession

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or vocation, or

              (b)             under Case VI of Schedule D as the profits of one or more foster care

arrangements.

          (4)      The second condition is that—

              (a)             the exemption in paragraph 10 or (as the case may be) 15(2) applies

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to the individual for the year of assessment, or

              (b)             the individual has elected for the alternative method of calculating

profits in paragraph 12, 13 or (as the case may be) 15(5) to apply to

him for the year of assessment.

          (5)      A period is a “relevant chargeable period” of a relevant individual if—

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Finance Bill
Schedule 36 — Foster carers
Part 3 — Capital allowances

    424

 

              (a)             it is a chargeable period of the individual,

              (b)             it corresponds to an income period for the individual’s foster care

receipts in a year of assessment, and

              (c)             that year of assessment is a year in which the individual satisfies the

conditions in sub-paragraphs (3) and (4).

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Provisions applying in relation to carried forward unrelieved qualifying expenditure

  17      (1)      This paragraph applies in any case where—

              (a)             there is any available qualifying expenditure in a relevant pool for a

relevant chargeable period of a relevant individual,

              (b)             that expenditure is unrelieved qualifying expenditure carried

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forward in the pool from the previous chargeable period under

section 59 of CAA 2001, and

              (c)             that previous chargeable period was not a relevant chargeable

period.

          (2)      In any such case, CAA 2001 has effect in relation to the relevant individual’s

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available qualifying expenditure in the pool for the relevant chargeable

period as if—

              (a)             a disposal event occurred immediately after the beginning of the

period,

              (b)             disposal receipts fall to be brought into account in the pool for that

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period by reason of that event, and

              (c)             the total of those disposal receipts equals the amount of the

unrelieved qualifying expenditure carried forward in the pool from

the previous chargeable period under section 59 of CAA 2001.

          (3)      In any such case, section 13 of CAA 2001 (use for qualifying activity of plant

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and machinery provided for other purposes) shall apply as if, on the first

day of the first subsequent chargeable period which is not a relevant

chargeable period,—

              (a)             the relevant individual brings into use for the purposes of his

provision of foster care such of the plant or machinery on which the

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unrelieved qualifying expenditure was incurred as he still owns on

that day, and

              (b)             he owns that plant or machinery as a result of having incurred capital

expenditure on its provision for purposes other than those of the

provision of foster care.

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          (4)      In this paragraph “relevant pool” means a pool containing expenditure

incurred on the provision of plant or machinery wholly or partly for the

purposes of the provision of foster care by the relevant individual.

Expenditure incurred in a relevant chargeable period not qualifying expenditure

  18       Capital expenditure (“excluded capital expenditure”) which is incurred—

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              (a)             by a relevant individual,

              (b)             in a relevant chargeable period, and

              (c)             on the provision of plant or machinery wholly or partly for the

purposes of the provision of foster care by the individual,

           does not constitute qualifying expenditure for the purposes of CAA 2001.

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Finance Bill
Schedule 36 — Foster carers
Part 4 — Supplementary

    425

 

Excluded capital expenditure: subsequent treatment of asset

  19       Where a relevant individual incurs excluded capital expenditure in a

relevant chargeable period, section 13 of CAA 2001 shall apply as if, on the

first day of the first subsequent chargeable period which is not a relevant

chargeable period,—

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              (a)             he brings into use for the purposes of his provision of foster care such

of the plant or machinery on which the expenditure was incurred as

he still owns on that day, and

              (b)             he owns that plant or machinery as a result of having incurred capital

expenditure on its provision for purposes other than those of the

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provision of foster care.

Interpretation of this Part

  20       Expressions which—

              (a)             are used in this Part, and

              (b)             are used in CAA 2001, but

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              (c)             apart from this paragraph, are not defined in this Schedule,

           have the same meaning in this Part as in that Act.

Part 4

Supplementary

Interpretation

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  21       In this Schedule—

                    “CAA 2001” means the Capital Allowances Act 2001 (c. 2);

                    “excluded capital expenditure” is to be construed in accordance with

paragraph 18;

                    “foster care arrangement” has the meaning given in paragraph 2(5);

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                    “foster care receipts” is to be construed in accordance with paragraph 3;

                    “income period” is to be construed in accordance with paragraph 3(2)

and (3);

                    “profits” includes gains;

                    “provision of foster care” has the meaning given in paragraph 4;

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                    “relevant chargeable period” is to be construed in accordance with

paragraph 16(5);

                    “relevant individual” is to be construed in accordance with paragraph

16(2);

                    “total foster care receipts” is to be construed in accordance with

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paragraph 5.

 

 

 
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