# Income Tax Act 2007, Section 1025: Meaning of “modified net income”

Extent: E+W+S+N.I.

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

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Source: https://www.legislation.gov.uk/ukpga/2007/3/section/1025 (the official version)
Page: https://openlegislation.uk/income-tax-act-2007/section-1025
Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.