Annex 1: Minor changes in the law made by the Act: Change 25: Expenses connected with foreign trades: relax condition for family expenses: drop “functions” test: section 92
This change allows a deduction for “family expenses” if the trader’s absence from the United Kingdom is partly for the purposes of a trade that is not carried on wholly outside the United Kingdom. It also drops the requirement that the taxpayer performs functions of the trade at each end of the journey.
Sections 80 and 81 of ICTA allow a trading deduction for three sorts of expenses. Each has a condition related to the purpose of the trader’s absence from the United Kingdom. The expenses are:
	travelling etc expenses of the trader between the United Kingdom and a foreign trade (section 80(3) of ICTA);
	travelling expenses of the trader between foreign trades (section 81(4) of ICTA); and
	travelling expenses of the trader’s family (section 80(5) of ICTA).
There is no need to have three separate conditions for these expenses.
The single condition relating to the purpose of the trader’s absence is in section 92(1)(b) of this Act. It applies to all the expenses with which the section deals.
This change is in taxpayers' favour in principle and may benefit some in practice. But the numbers affected and the amounts involved are likely to be small.