Income Tax (Trading and Other Income) Act 2005

796 Alternative calculation of profits: trading income

(1) This section applies if the individual has any rent-a-room receipts for the tax year which are the receipts of a trade.

(2) The profits of the trade for the tax year are—

(a) the sum of the amount of the rent-a-room receipts for the tax year arising from the trade and the amount of any relevant balancing charge, less

(b) the deductible amount.

(3) The deductible amount—

(a) is L if all the individual’s rent-a-room receipts for the tax year arise from the trade, and

(b) otherwise, is—

but, in either case, subject to a maximum of T.

(4) In subsection (3)—

• L is the individual’s limit for the tax year,

• T is the individual’s rent-a-room receipts for the tax year arising from the trade, and

• R is all the individual’s rent-a-room receipts for the tax year.

(5) In calculating the amount of any rent-a-room receipts for the purposes of this section, no deduction is allowed for expenses or any other matter.