Paragraph 4 Calculation of the parent’s residual incomeI1
England and Wales
For the purposes of determining the taxable income of a student’s parent, any deductions which fall to be made or exemptions which are permitted—
by way of personal reliefs provided for in Chapter 1 of Part VII of the Income and Corporation Taxes Act 1988, or where the income is computed for the purposes of the income tax legislation of another EEA State or Switzerland, the gross amount of any such premium in respect of which relief would be given if that legislation made provision equivalent to the Income Tax Acts;
pursuant to any enactment or rule of law under which payments which would otherwise under United Kingdom law form part of a person’s income are not treated as such; or
under sub-paragraph (2),
shall not be made or permitted.
For the purpose of determining the residual income of a student’s parent, there shall be deducted from the taxable income determined under sub-paragraph (1) the aggregate of any amounts falling within any of the following sub-paragraphs—
the gross amount of any premium or other sum relating to a pension (not being a pension payable under a policy of life assurance) in respect of which relief is given under section 273, 619 or 639 of the Income and Corporation Taxes Act 1988 or under section 188 of the Finance Act 2004, or where the income is computed for the purpose of the income tax legislation of another EEA State or Switzerland, the gross amount of any such premium or sum in respect of which relief would be given if that legislation made provision equivalent to the Income Tax Acts;
in any case where income is computed in accordance with sub-paragraph (5) any sums equivalent to the deduction mentioned in paragraph (a), provided that any sums so deducted shall not exceed the deductions which would be made if the whole of the parent’s income were in fact income for the purposes of the Income Tax Acts; and
in the case of a parent student or a student’s parent who holds a statutory award, £1,130.
Where the Secretary of State is satisfied that the residual income of the student’s parent in the financial year beginning immediately before the academic year (“current financial year”) is likely to be not more than 85 per cent. of the sterling value of the parent’s residual income in the preceding financial year the Secretary of State may, for the purpose of enabling the student to attend the course without hardship, ascertain the parent’s residual income for the current financial year.
Where the student’s parent (“A”) satisfies the Secretary of State that A’s income is wholly or mainly derived from the profits of a business or profession carried on by A, then any reference in this Part to a preceding financial year shall mean the earliest period of twelve months which ends after the start of the preceding financial year and in respect of which accounts are kept relating to that business or profession.
Where the student’s parent (“A”) is in receipt of any income which does not form part of A’s income for the purposes of the Income Tax Acts or the income tax legislation of another EEA State or Switzerland by reason only that—
A is not resident, ordinarily resident or domiciled in the United Kingdom, or where A’s income is computed as for the purposes of the income tax legislation of another EEA State or Switzerland, not so resident, ordinarily resident or domiciled in that EEA State or Switzerland;
the income does not arise in the United Kingdom, or where A’s income is computed for the purposes of the income tax legislation of another EEA State or Switzerland, does not arise in that EEA State or Switzerland; or
the income arises from an office, service or employment, income from which is exempt from tax in pursuance of any legislation,
A’s taxable income for the purpose of this Schedule shall be computed as though the income under this sub-paragraph were part of A’s income for the purpose of the Income Tax Acts or the income tax legislation of another EEA State or Switzerland, as the case may be.
Where the income of the student’s parent is computed as for the purposes of the income tax legislation of another EEA State or Switzerland, it shall be computed under the provision of this Schedule in the currency of that EEA State or Switzerland and the income of the parent for the purposes of this Schedule shall be the sterling value of that income determined in accordance with the rate for the month in which the last day of the financial year in question falls, as published by the Office for National Statistics.
Where one of the student’s parents dies either before or during the academic year and that parent’s income has been or would be taken into account for the purposes of determining the household income, the household income shall—
where the parent dies before the academic year, be determined by reference to the income of the surviving parent; or
where the parent dies during the academic year, be the aggregate of—
the appropriate proportion of the household income determined by reference to the income of both parents, being the proportion in respect of that part of the academic year during which both parents were alive; and
the appropriate proportion of the household income determined by reference to the income of the surviving parent, being the proportion in respect of that part of the academic year remaining after the death of the other parent.
Where the Secretary of State determines that the parents are separated for the duration of the academic year, the household income is determined by reference to the income of whichever parent the Secretary of State considers most appropriate under the circumstances.
Where the Secretary of State determines that the parents have separated in the course of the academic year, the household income is determined by reference to the aggregate of—
the appropriate proportion of the household income determined in accordance with sub-paragraph (8), being the proportion in respect of that part of the academic year for which the parents are separated; and
the appropriate proportion of the household income determined otherwise in respect of the remainder of the academic year.
Annotations
Commencement
- I1
Sch. 2 para. 4 in force at 17.4.2010, see reg. 1