BIM40520 - Specific receipts: domestic microgeneration: Income Tax exemption for domestic microgeneration

S782A Income Tax (Trading and Other Income) Act 2005

With effect from tax year 2007-08 there is an exemption from Income Tax for an individual바카라 사이트™s income from the sale of electricity generated by a microgeneration system where:

  1. the system is installed at or near domestic premises occupied by the individual, and
  2. the individual intends that the amount of electricity generated by the microgeneration system will not significantly exceed the amount of electricity consumed in those premises.

For the purpose of this exemption 바카라 사이트˜domestic premises바카라 사이트™ means premises used wholly or mainly as a separate private dwelling.

A 바카라 사이트˜microgeneration system바카라 사이트™ is defined in S263AZA of the Taxation of Chargeable Gains Act.

This exemption is aimed at domestic microgeneration which is primarily intended to match the generator바카라 사이트™s own home consumption needs. The term 바카라 사이트˜significantly exceed바카라 사이트™ in (b) above is not defined in Section 782A and should be considered by reference to the particular circumstances. However, in general, a householder who does not intend to generate an amount of electricity more than 20% in excess of their own domestic needs is unlikely to be regarded as intending to significantly exceed the amount of electricity consumed in their own premises.

No income tax will therefore arise on feed-in tariffs received by an individual from domestic microgeneration where the above conditions are met.

The exemption may apply where an individual installs a microgeneration system at a property which is not the individual바카라 사이트™s main residence provided that the other domestic property is used by the individual, wholly or mainly, as a separate private dwelling and the other conditions are met.