PIM1104 - Use of trading income rules: application of trading income rules: IT
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 the Income Tax (Trading and Other Income) Act 2005 (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) | Category | 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) | Category | Instructions |
---|---|---|
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) | Category | Instructions |
---|---|---|
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) | Category | Instructions |
---|---|---|
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.) | Instructions | |
---|---|---|
Section 109 | Receipt by donor or connected person of benefit attributable to certain gifts | BIM45180 |
In Chapter 10A (long funding leases) | Category | Instructions |
---|---|---|
Sections 148A to 148J | Leases of plant or machinery: special rules for long funding leases\nPlease note 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) | Category |
---|---|
Section 155 | Levies and repayments under FISMA 2000 |
In Chapter 13 (deductions from profits) | Category | Instructions |
---|---|---|
Sections 188 to 191 | Unremittable amounts | BIM42750 |