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

Exclusion from relief: payments by close company

Section 783AQ is an anti-avoidance provision that prevents the trading allowance from being claimed where the individual's relevant income includes a payment from a close company in which they are a participator or an associate of a participator.

• No trading allowance relief is available for a tax year if the individual's relevant income includes a payment made by or on behalf of a close company.
• The exclusion applies where the individual is a participator in the close company at the time the payment is made.
• The exclusion also applies where the individual is an associate of a participator in the close company at the time of the payment.
• The terms "associate" and "participator" take their meanings from Part 10 of the Corporation Tax Act 2010 (sections 448 and 454).