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HMRC internal manual

Business Income Manual

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HM Revenue & Customs
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Builders, property dealers & developers: income recognition: premiums

S158 Income Tax (Trading and Other Income) Act 2005, S136 Corporation Tax Act 2009

Where a premium or similar amount would otherwise be brought into account as a trading receipt in computing the profits of a trade of dealing in land (which should be taken as including a trade of building as well as trades of property dealing, estate development etc) and all or part of the amount is also a receipt of a property business, the trading receipt is treated as reduced by the amount of the property business receipt.

See PIM1200 onwards for guidance on the taxation of premiums etc as receipts of a property business.

S158 ITTOIA 2005 does not apply in calculating the profits of a trade, profession or vocation on the cash basis (see BIM70000 onwards).