Section 1025 | Meaning of “modified net income”

(1)For the purposes of this Act a person's modified net income for a tax year (“year X”) is the person's net income for year X calculated in accordance with Steps 1 and 2 of section 23 (calculation of income tax liability) as modified by subsection (2).

(2)In applying Steps 1 and 2 of section 23, ignore—

(a)any non-qualifying income included in the person's total income (see section 1026),

(b)any relief under Chapter 2 of Part 4 for a loss incurred or treated as incurred, or a payment made, in a tax year later than year X,

(c)any reliefs to which the person may be entitled under Chapter 4 of Part 8,

(d)any adjustment of profits resulting from a claim under Chapter 16 of Part 2 of ITTOIA 2005 (averaging profits of farmers and creative artists), if year X is any earlier tax year in relation to which the claim is made,^F1

(e)any adjustment resulting from an election under section 257 of ITTOIA 2005 (election to carry back post-cessation receipts), and

(f)any relief or adjustment resulting from the making, amendment or revocation of a claim for relief, if the claim, amendment or revocation would have been out of time but for section 224(4) of ITTOIA 2005 (averaging profits of farmers and creative artists: extension of deadline for claiming other reliefs).

(3)This section applies for the purposes of section 427 as if subsection (2)(c) were omitted.

(4)Repealed^F2

(5)In this section “claim” includes an election or notice.