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Part 3Property income

Chapter 3Profits of property businesses: basic rules

Calculation of profits

272Profits of a property business: application of trading income rules

(1)The profits of a property business are calculated in the same way as the profits of a trade.

(2)But the provisions of Part 2 (trading income) which apply as a result of subsection (1) are limited to the following—

In Chapter 3 (basic rules)—
section 25generally accepted accounting practice
section 26losses calculated on same basis as profits
section 27receipts and expenses
section 28items treated under CAA 2001 as receipts and expenses
section 29interest
In Chapter 4 (rules restricting deductions)—
section 33capital expenditure
section 34expenses not wholly and exclusively for trade and unconnected losses
section 35bad and doubtful debts
sections 36 and 37unpaid remuneration
sections 38 to 44employee benefit contributions
sections 45 to 47business entertainment and gifts
sections 48 to 50car or motor cycle hire
section 51patent royalties
section 52exclusion of double relief for interest
section 53social security contributions
section 54penalties, interest and VAT surcharges
section 55crime-related payments
In Chapter 5 (rules allowing deductions)—
section 57pre-trading expenses
sections 58 and 59incidental costs of obtaining finance
section 68replacement and alteration of trade tools
section 69payments for restrictive undertakings
sections 70 and 71seconded employees
section 72payroll deduction schemes: contributions to agents' expenses
sections 73 to 75counselling and retraining expenses
sections 76 to 80redundancy payments etc.
section 81personal security expenses
sections 82 to 86contributions to local enterprise organisations or urban regeneration companies
sections 87 and 88scientific research
sections 89 and 90expenses connected with patents, designs and trade marks
section 91payments to Export Credits Guarantee Department
In Chapter 6 (receipts)—
section 96capital receipts
section 97debts incurred and later released
section 104distribution of assets of mutual concerns
section 105industrial development grants
section 106sums recovered under insurance policies etc.
In Chapter 7 (gifts to charities etc.)—
section 109receipt by donor or connected person of benefit attributable to certain gifts
In Chapter 11 (other specific trades)—
section 155levies and repayments under FISMA 2000
In Chapter 13 (deductions from profits)—
sections 188 to 191unremittable amounts

(3)In those provisions the expression “this Part” is to be read as a reference to those provisions as applied by subsection (2) and to the other provisions of Part 3.