E1.707 Capital allowances for qualifying carers carrying on a trade
The normal rules governing capital allowances for expenditure on plant or machinery are modified where an individual has qualifying care receipts for a year of assessment in which he is either exempt or has elected to be assessed under the alternative method. The overall effect is that, in tax years when either form of relief applies, capital allowances and balancing charges in respect of plant and machinery used to provide qualifying care are not relevant. Unlike the original provisions relating to foster care, those contained in ITTOIA 2005, when enacted, made no reference to the rules that applied when the foster care did not amount to a trade and the foster-care receipts were chargeable under Schedule D Case VI. That is because an arrangement to provide foster care (now qualifying care) is not a qualifying activity within CAA 2001, s 15(1) (see B3.304) and therefore the question of capital allowances and balancing charges cannot arise1.
See E1.701 for the extension of relief to shared lives carers.
In the provisions described in this article, an individual is a 'relevant individual' if in a tax year the full qualifying care relief (see E1.704, E1.706), or the alternative method of calculating profits (see E1.705, E1.706), applies to the individual for the tax year2. A period is a 'relevant chargeable period' of a relevant individual if:
• it is a chargeable period of the individual, and
• it corresponds to the income period for the individual's
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