PIM1093 - Application of trading income rules: cash basis
The profits of a property business under the cash basis are calculated in the same way as the profits of a trade. Certain trading income rules in Part 2 of ITTOIA05 apply for the purposes of computing the profits of a property business. They are set out in S272ZA(1) and are listed below:
| In Chapter 3 (basic rules) | Category | Manual |
|---|---|---|
| Section 26 | Losses
calculated on same basis as profits | BIM31000 onwards |
| Section 28A | Money's worth | BIM40051 |
| Section 29 | Interest | BIM45650 onwards |
| In Chapter 4 (rules restricting deductions) | Category | Manual |
|---|---|---|
| Section 34 | Expenses
not wholly and exclusively for trade and unconnected losses | BIM37000 onwards |
| Sections
38 to 42, and 44 | Employee
benefit contributions | BIM44500 onwards |
| Sections
45 to 47 | Business entertainment and gifts | BIM45000 onwards |
| Section 52 | Exclusion
of double relief for interest | BIM45765 |
| Section 53 | Social
security contributions | |
| Section 54 | Penalties,
interest and VAT surcharges | BIM47090 |
| Section 55 | Crime-related
payments | BIM43100 onwards |
| Section 55A | Expenditure
on integral features | BIM46945 |
| In
Chapter 5 (rules allowing deductions) | Category | Manual |
|---|---|---|
| Section 57 | Pre-trading expenses | BIM46350 onwards |
| Sections 58 and 59 | Incidental
costs of obtaining finance | BIM45800 onwards |
| Section 69 | Payments
for restrictive undertakings | BIM47005 |
| Sections 70 and 71 | Seconded employees | BIM47115 to BIM47120 |
| Section 72 | Payroll
deduction schemes: contributions to agents' expenses | BIM45195 |
| Sections 73 to 75 | Counselling
and retraining expenses | BIM47217 to BIM47218 |
| Sections 76 to 80 | Redundancy
payments etc. | BIM47200 onwards |
| Section 81 | Personal
security expenses | BIM47300 onwards |
| Sections 82 to 86 | Contributions
to local enterprise organisations or urban regeneration companies | BIM47610 |
| Sections 87 and 88 | Scientific research | BIM45950
onwards |
| Sections 89 and 90 | Expenses
connected with patents, designs and trade marks | BIM45950 onwards |
| Section 91 | Payments
to Export Credits Guarantee Department | BIM45580 |
| In Chapter 5A (deductions allowable at a fixed rate) | Category | Manual |
|---|---|---|
| Section 94C | exclusion
of provisions of Chapter 5A for firms with partner who is not an individual | BIM75000 |
| Sections 94D to 94G | expenditure
on vehicles | BIM75000 |
| In Chapter 6 (receipts) | Category | Manual |
|---|---|---|
| Section 96 | Capital receipts | BIM35002 |
| Section 97 | Debts
incurred and later released | BIM40265 |
| Section 104 | Distribution
of assets of mutual concerns | BIM24550 onwards |
| Section
105(1) and (2)(b) and (c) | Industrial
development grants | BIM40465 |
| Section 106 | Sums
recovered under insurance policies etc. | BIM40750 onwards |
| In Chapter 6A (amounts not reflecting commercial transactions) | Category | Manual |
|---|---|---|
| Section 106C | amounts
not reflecting commercial transactions | |
| Section 106D | capital receipts | |
| Section 106E | gifts
to charities etc |
| In Chapter 7 (gifts to charities etc.) | Category | Manual |
|---|---|---|
| Section 109 | Receipt
by donor or connected person of benefit attributable to certain gifts | BIM45180 |