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HMRC internal manual

Property Income Manual

From
HM Revenue & Customs
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Use of trading income rules: IT for 2005-06 onwards

 

The profits of a rental business are calculated in the same way as the profits of a trade.

The trading income rules in Part 2 of ITTOIA05 that apply for the purposes of computing the profits of a rental business are set out in ITTOIA05/S272 (2). They are listed below:

| In Chapter 3 (basic rules) |   | Instructions | || | Section 25 | Generally accepted accounting practice | BIM31000 onwards | | Section 26 | Losses calculated on same basis as profits | BIM31000 onwards | | Section 27 | Receipts and expenses | BIM31000 onwards | | Section 28 | Items treated under CAA01 as receipts and expenses | CA29320 | | Section 29 | Interest | BIM45650 onwards | | In Chapter 4 (rules restricting deductions) |   |   | | Section 33 | Capital expenditure | BIM35000 onwards | | Section 34 | Expenses not wholly and exclusively for trade and unconnected losses | BIM37000 onwards | | Section 35 | Bad and doubtful debts | BIM42700 onwards | | Sections 36 and 37 | Unpaid remuneration | BIM47130 onwards | | Sections 38 to 44 | Employee benefit contributions | BIM44500 onwards | | Sections 45 to 47 | Business entertainment and gifts | BIM45000 onwards | | Sections 48 to 50 | Car or motor cycle hire | BIM47700 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 | | In Chapter 5 (rules allowing deductions) |   |   | | Section 57 | Pre-trading expenses | BIM46350 onwards | | Sections 58 and 59 | Incidental costs of obtaining finance | BIM45800 onwards | | Section 68 | Replacement and alteration of trade tools | BIM46935 | | Section 69 | Payments for restrictive undertakings | BIM47005 | | Sections 70 and 71 | Seconded employees | BIM47115 - BIM47120 | | Section 72 | Payroll deduction schemes: contributions to agents’ expenses | BIM45210 | | Sections 73 to 75 | Counselling and retraining expenses | BIM47060 | | 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 | BIM45955 | | 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 6 (receipts) |   |   | | Section 96 | Capital receipts | BIM35000 onwards | | Section 97 | Debts incurred and later released | BIM40265 | | Section 104 | Distribution of assets of mutual concerns | BIM24550 onwards | | Section 105 | Industrial development grants | BIM40465 | | Section 106 | Sums recovered under insurance policies etc. | BIM40750 onwards | | In Chapter 7 (gifts to charities etc.) |   |   | | Section 109 | Receipt by donor or connected person of benefit attributable to certain gifts | BIM45180 | | In Chapter 10A (long funding leases) |   |   | | Sections 148A to 148J | Leases of plant or machinery: special rules for long funding leases
 

n.b. rules introduced by FA06. See commencement provisions at FA 2006, Sch 8, Paras 15-27 for more details. BLM40100 onwards    
  In Chapter 11 (other specific trades)    
  Section 155 Levies and repayments under FISMA 2000  
  In Chapter 13 (deductions from profits)    
  Sections 188 to 191 Unremittable amounts BIM42750