Commentary on Sections Part 7: Income charged under this Act: rent-a-room and foster-care relief Overview Section 821: Meaning of “relevant limit”
3040.This section introduces and defines the term “relevant limit”. It is based on paragraph 15 of Schedule 36 to FA 2003.
3041.For cases where the foster-care activities amount to a trade and accounts are prepared to a date other than 5 April, the amount with which the individual’s total foster-care receipts are compared to determine what form of relief is available is the individual’s “relevant limit” (and not, as normally, “the limit”). The calculation of the relevant limit reflects the fact that the basis period of the trade will not coincide with the periods (tax years) for which the “fixed amount” and the “amount per child” are determined. This section give rules to link the “fixed amount” and the “amount per child” for tax years to basis periods.