Income Tax (Trading and Other Income) Act 2005 section 783AP

Exclusion from relief: payments by firm

Section 783AP prevents the trading allowance from being claimed where an individual's relevant income includes payments received from a partnership in which they are a partner or connected to a partner.

• This is an anti-avoidance measure targeting misuse of the trading allowance by partners in firms
• Relief under the trading allowance chapter is denied entirely for the tax year if the conditions are met
• The exclusion applies where the individual's relevant income includes a payment made by, or on behalf of, a firm in which they are a partner or are connected with a partner
• Both direct payments from the firm and payments made on the firm's behalf are caught by this rule