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HMRC internal manual

Business Income Manual

Using this manual in computing property income

S272 Income Tax (Trading and Other Income) Act 2005, S210 Corporation Tax Act 2009

Because the profits of a property business are calculated, for the purposes of Income Tax and Corporation Tax, in the same way as the profits of a trade, most of the guidance in the Business Income Manual applies to both trades and property businesses.

There are, however, some areas where the computation of property income is different to that for a trade:

  • for Income Tax, trade basis periods are not used (but see PIM1040 for partnerships);
  • there are separate rules on loss relief (except for furnished holiday lettings - see PIM4130);
  • there are separate rules on lease premium relief;
  • for Corporation Tax, property business profits are calculated excluding items dealt with under the loan relationship and derivative contracts rules;
  • there are some statutory rules which apply only to property business profits, and these are covered in the Property Income Manual.

For avoidance of doubt the following sections of the Business Income Manual are relevant to property businesses:



Issue Page reference
Distribution of assets of mutual concerns BIM24550 onwards
Generally accepted accounting practice BIM31000 onwards
Losses calculated on same basis as profits BIM30500 onwards
Receipts and expenses BIM30500 onwards
Change of accounting basis BIM34000 onwards
Capital expenditure BIM35000 onwards
Industrial development grants BIM40465
Sums recovered under insurance policies etc BIM40750 onwards
Bad and doubtful debts BIM42700 onwards
Crime-related payments BIM43100 onwards
Employee benefit contributions BIM44500 onwards
Business entertainment and gifts BIM45000 onwards
Payroll deduction schemes: contributions to agents’ expenses BIM45195
Payments to Export Credits Guarantee Department BIM45580
Interest (Income Tax payers) BIM45650 onwards
Exclusion of double relief for interest BIM45765
Incidental costs of obtaining finance BIM45800 onwards
Expenses connected with patents, designs and trade marks BIM45950 onwards
Pre-trading expenses BIM46350 onwards
Replacement and alteration of trade tools BIM46960
Payments for restrictive undertakings BIM47005
Counselling and retraining expenses BIM47217
Relief for the cost of training employees BIM47080
Penalties, interest and VAT surcharges BIM47090
Seconded employees BIM47115 - BIM47120 
Unpaid remuneration BIM47130 onwards
Redundancy payments etc BIM47200 onwards
Expenses in connection with security BIM47300 onwards
Contributions to local enterprise organisations or urban regeneration companies BIM47610
Car or motor cycle hire BIM47700 onwards
Cessation, treatment on a complete change of partners BIM82200 onwards
Post-cessation receipts and expenses BIM90000 onwards