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 |