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Adoption payments

assisted adoption

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My client has Fostered many children over many years but thay have recently decided to adopt.

They have had their income means tested and they qualify for Assisted Adoption payments. This is split into two parts, Permamemcy Fee and Asssisted Adoption Allowance. Combined these payments come to a not insignificant weekly amount.

I have dealt with the Foster Care 'income' in the past but with the significant tax allowances available there has never been any tax payable.

I beleive that ITTOA s744 exempts these adpotion payments but would welcome the thoughts of those with more experinnce in this area.

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By Phil30
03rd Aug 2021 15:44

Nobody with experience of this?

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Replying to Phil30:
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By Hugo Fair
03rd Aug 2021 16:46

Apparently not!
I've looked at The Adoption Allowance Regulations 1991 ... https://www.legislation.gov.uk/uksi/1991/2030/made ... but there's no mention of taxable status.
As you say, ITTOA s744 looks promising - but there are a lot of conditions in play (for many of which I've got no experience in this context), so you need input from someone with direct experience.
Can the agency that arranged the adoption not provide advice?

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By Tax Dragon
04th Aug 2021 06:48

Phil30 wrote:

I beleive that ITTOA s744 exempts these adpotion payments

Seems to me that, like s744, you need to be more specific. (I.e. which bit/s of s744 do you believe apply/ies?) As soon as you've confirmed that, you have your answer, surely?

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By Phil30
04th Aug 2021 10:43

Thank you for the responses - it is appreciated.

For reference I did speak to the authority making the payments (Leeds Council) but as expected they were not for giving specific tax advice! However, they were helpful. Any adoption allowance is exempt from tax - which confirms what I had found - and any part referred to as a 'fee' is potentially taxable - so the permanency fee in my case.

Thanks again.

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