Specific receipts: rents: profits from services to tenants
A trade may be carried on as part of, or ancillary to, a letting activity if a lessor provides significant services to a lessee. In order to establish that the provision of services amounts to a trade, it would need to be shown that such services went well beyond those normally provided by a lessor to a lessee. In practice, such cases will be rare. For the approach to be adopted in considering such cases see PIM4300.
Where, exceptionally, it is accepted that the provision of services is a separate trade in addition to the rental business, then the trade profit derived from those services must be computed. Any reasonable allocation as between rent proper and charge for services may be accepted. No objection need be offered to allowing, as an expense, such proportion of general management expenses as are necessarily incurred in the course of earning profits from services.