Commentary on Sections Part 7: Income charged under this Act: rent-a-room and foster-care relief Overview Section 798: Alternative calculation of profits: income chargeable under Chapter 8 of Part 5
2972.This section sets out the basis of calculation when the rent-a-room income is income that is taxed under Chapter 8 of Part 5 of this Act and it exceeds the rent-a-room limit. It is new.
2973.Subsection (1) reflects the extension of rent-a-room relief to certain income that is, in the source legislation, charged under Schedule D Case VI. See Change 128 in Annex 1. It gives a deduction rule for income charged under Chapter 8 of Part 5 of this Act that reflects similar rules for trading and property income in, respectively, section 796 and section 797.
2974.Subsection (3) provides for an apportionment of the available rent-a-room deduction between income charged under Chapter 8 of Part 5 of this Act and other income. It does not address the case where an individual’s rent-a-room income consists wholly of income charged under Chapter 8 of Part 5 of this Act. That is because such income can, in the rent-a-room context, exist only in company with other (normally property business) rent-a-room letting income.
2975.There is no reference to any capital allowances adjustments because there is no statutory provision for capital allowances for income within Chapter 8 of Part 5 of this Act.