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

Meaning of “modified net income” 1025 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.