787B Relevant earnings and net relevant earnings.

(1) For the purposes of this Chapter but subject to subsection (2), “relevant earnings”, in relation to an individual, means any income of the individual chargeable to tax for the year of assessment in question, being any of the following—

(a) income arising in respect of remuneration from an office or employment of profit held by the individual,

(b) income from any property which is attached to or forms part of the emoluments of any such office or employment of profit held by the individual, or

(c) income which is chargeable under Schedule D and is immediately derived by the individual from the carrying on or exercise by the individual of his or her trade or profession either as an individual or, in the case of a partnership, as a partner personally acting in the partnership;

but does not include any remuneration from an investment company of which the individual is a proprietary director or a proprietary employee.

(2) For the purposes of this Chapter, the relevant earnings of an individual shall not be treated as the relevant earnings of his or her ^[3]>spouse^<[3][3]>spouse or civil partner^<[3], notwithstanding that the individual’s income chargeable to tax is treated as his or her ^[4]>spouse’s^<[4][4]>spouse’s or civil partner’s^<[4] income.

(3) For the purposes of relief under this Chapter, an individual’s relevant earnings shall be those earnings before giving effect to any deduction to be made from those earnings in respect of a loss or in respect of a capital allowance (within the meaning of section 2), and references to income in this Chapter (other than references to total income) shall be construed similarly.

(4) For the purposes of this Chapter, “net relevant earnings”, in relation to an individual and subject to subsections (5) to (7), means the amount of the individual’s relevant earnings for the year of assessment in question less the amount of any deductions to be made from the relevant earnings in computing the individual’s total income for that year, being either—

(a) deductions in respect of payments made by the individual, or

(b) deductions in respect of losses or of such allowances mentioned in subsection (3), being losses or allowances arising from activities, profits or gains of which would be included in computing relevant earnings of the individual or of the individual’s ^[3]>spouse^<[3][3]>spouse or civil partner^<[3] for the year of assessment.

(5) Where in any year of assessment for which an individual claims and is allowed relief under this Chapter there is to be made in computing the total income of the individual or of the individual’s ^[3]>spouse^<[3][3]>spouse or civil partner^<[3] a deduction in respect of any such loss or allowance of the individual referred to in subsection (4)(b), and the deduction or part of it is to be so made from income other than relevant earnings, then, the amount of the deduction made from that other income shall be treated as reducing the individual’s net relevant earnings for subsequent years of assessment and shall be deducted as far as may be from those of the following year, whether or not the individual claims or is entitled to claim relief under this Chapter for that year, and in so far as it cannot be so deducted, then from those of the next year, and so on.

(6) Where an individual’s income for any year of assessment consists partly of relevant earnings and partly of other income, then, as far as may be, any deductions to be made in computing the individual’s total income, and which may be treated in whole or in part either as made from relevant earnings or as made from other income, shall be treated for the purposes of this section as being made from those relevant earnings in so far as they are deductions in respect of any such loss referred to in subsection (4)(b) and otherwise as being made from that other income.

(7) An individual’s net relevant earnings for any year of assessment shall be computed without regard to any relief to be given for that year under this Chapter either to the individual or to the individual’s ^[3]>spouse^<[3][3]>spouse or civil partner^<[3].

(8) Notwithstanding anything in this section, for the purposes of relief under this Chapter an individual’s net relevant earnings ^[2]>shall not exceed €254,000^<[2][2]>shall not exceed the earnings limit^<[2] but this subsection shall not apply as regards relief for additional voluntary PRSA contributions.