AI Summary of 787W. Relevant earnings and net relevant earnings.
This Chapter clarifies the definition and treatment of 'relevant earnings' for individuals in relation to tax liability. Relevant earnings encompass income generated from employment remuneration, associated property income, and trade or professional income, while excluding remuneration from investment companies where the individual acts as a proprietary director or employee.
The net relevant earnings are determined by deducting specific losses or capital allowances from an individual's relevant earnings, while preserving the integrity of taxation relief. Notably, relief cannot exceed a specified earnings limit, ensuring compliance with regulatory provisions.
787W. Relevant earnings and net relevant earnings.
(1) For the purposes of this Chapter but subject to subsection (2), 'relevant earnings', in relation to an individual, means any income of the individual chargeable to tax for the year of assessment in question, being any of the following -
(a) income arising in respect of remuneration from an office or employment of profit held by the individual,
(b) income from any property which is attached to or forms part of the emoluments of any such office or employment of profit held by the individual, or
(c) income which is chargeable under Schedule D and is immediately derived by the individual from the carrying on or exercise by the individual of his or her trade or profession either as an individual or, in the case of a partnership, as a partner personally acting in the partnership,
but does not include any remuneration from an investment company of which the individual is a proprietary director or a proprietary employee.
(2) For the purposes of this Chapter, the relevant earnings of an individual shall not be treated as the relevant earnings of his or her spouse or civil partner, notwithstanding that the individual's income chargeable to tax is treated as his or her spouse's or civil partner's income.