Chapter 1: Introduction
Section 260: Overview of Part 3
1034.This section is introductory. It is new.
1035.Subsection (1) sets out the components of “property income”.
1036.Subsection (1)(a) refers to the main component. That is income from land that is taxed in the source legislation under Schedule A if it is land in the United Kingdom and under Schedule D Case V if it is foreign land. Central to the charge is the concept of the “property business”. That is discussed in more detail in the commentary on sections 264 and 265.
1037.Subsection (1)(e) refers to post-cessation receipts of a UK property business. In the source legislation they are charged under Schedule D Case VI. This Act deals with the income where it logically belongs. In this case, the income is property income.
Section 261: Provisions which must be given priority over Part 3
1038.This section provides the rules to determine which Part takes priority in the event of any overlap of the charge on the profits of a trade and the charge on the profits of an overseas property business or the charge under Chapters 8 and 9 of this Part.
1039.It is based on section 18 of ICTA and section 65A(1) of ICTA as regards overlap between an overseas property business and a foreign trade. It gives statutory effect to the Crown Option as regards overlap between an overseas property business and a UK trade. See Change 66 in Annex 1.
1040.It is based on the definitions of Schedule D Cases I and VI in section 18 of ICTA as regards overlap between a trade and the profits of a UK concern or the profits of a UK electric line wayleave. Case VI charges income that is not charged under any other case. So it is correct to give trading income (Case I in the source legislation) priority.
Section 262: Priority between Chapters within Part 3
1041.This section gives an order of priority between Chapter 3 and Chapters 8 and 9 of this Part of this Act and between Chapters 8 and 9. It is based on sections 119(1) and 120(1) of ICTA.
1042.Subsection (3) deals with income that falls within both Chapter 8 and Chapter 9 of this Part of this Act. See Change 5 in Annex 1.
