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Payments towards the cost of maintenance of a husband, wife, or other close relative or dependant out of the income of a severely incapacitated person, who receives funds under an Order of the Court of Protection, are regarded as voluntary payments and not as income of the recipients. »Ê¹ÚÌåÓýapprefore, there will be no tax or NICs consequences on such payments made for caring duties. Similarly, where payments emanate out of a Trust Fund set up for this purpose there is unlikely to be an enforceable contract, therefore, there should be no question of tax being assessable as employment income or of a liability for Class 1 NICs.

Caring activity under these circumstances would not amount to gainful employment so there will be no liability for Class 2 NICs. »Ê¹ÚÌåÓýapp services provided are unlikely to be regarded as commercial in nature or amount to valuable consideration so there will not be a charge to tax on trade profits or on income not otherwise charged to tax - see BIM52785.

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)