Income and Corporation Taxes Act 1988

M1 15 Schedule A. U.K.

(1) The Schedule referred to as Schedule A is as follows:—

[F1 SCHEDULE A

1. (1) Tax is charged under this Schedule on the annual profits arising from a business carried on for the exploitation, as a source of rents or other receipts, of any estate, interest or rights in or over land in the United Kingdom.

(2) To the extent that any transaction is entered into for the exploitation, as a source of rents or other receipts, of any estate, interest or rights in or over land in the United Kingdom, it is taken to be entered into in the course of such a business.

(3) All businesses and transactions carried on or entered into by a particular person or partnership, so far as they are businesses or transactions the profits of which are chargeable to tax under this Schedule, are treated for the purposes of this Schedule as, or as entered into in the course of carrying on, a single business.

There are qualifications to this rule in the case of—

(a) companies not resident in the United Kingdom (see subsection (1A) below); and

(b) insurance companies (see sections 432AA and 441B(2A)).

(4) The receipts referred to in the expression “as a source of rents or other receipts” include—

(a) payments in respect of a licence to occupy or otherwise to use land or the exercise of any other right over land, and

(b) rentcharges F2 . . . and other annual payments reserved in respect of, or charged on or issuing out of, the land.

2. (1) This Schedule does not apply to profits arising from the occupation of land.

(2) This Schedule does not apply to—

(a) profits charged to tax under Case I of Schedule D under—

• section 53(1) (farming and market gardening), or

• section 55 (mines, quarries and other concerns);

(b) receipts or expenses taken into account as trading receipts or expenses under section 98 (tied premises);

(c) rent charged to tax under Schedule D under—

• section 119 (rent, etc. payable in connection with mines, quarries and other concerns), or

• section 120(1) (certain rent, etc. payable in respect of electric line wayleaves).

(3) The profits of a Schedule A business carried on by a company shall be computed without regard to items giving rise to—

• credits or debits within Chapter II of Part IV of the Finance Act 1996 (loan relationships), or

• F3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• [F4 credits or debits within Schedule 26 to the Finance Act 2002 (derivative contracts).]

• This Schedule does not affect the operation of those provisions.

3. (1) For the purposes of this Schedule a right to use a caravan or houseboat, where the use to which the caravan or houseboat may be put in pursuance of the right is confined to use at a single location in the United Kingdom, is treated as a right deriving from an estate or interest in land in the United Kingdom.

(2) In sub-paragraph (1)—

• “caravan” has the meaning given by section 29(1) of the Caravan Sites and Control of Development Act 1960; and

• “houseboat” means a boat or similar structure designed or adapted for use as a place of human habitation.

4. (1) In the case of a furnished letting, any sum payable for the use of furniture shall be taken into account in computing the profits chargeable to tax under this Schedule in the same way as rent.

Expenses in connection with the provision of furniture shall similarly be taken into account in the same way as expenses in connection with the premises.

(2) A furnished letting means where—

(a) a sum is payable in respect of the use of premises, and

(b) the tenant or other person entitled to the use of the premises is also entitled, in connection with that use, to the use of furniture.

(3) This paragraph does not apply if the receipts and expenses are taken into account in computing the profits of a trade consisting in, or involving, making furniture available for use in premises.

(4) In this paragraph—

(a) any reference to a sum includes the value of consideration other than money, and references to a sum being payable shall be construed accordingly; and

(b) “premises” includes a caravan or houseboat within the meaning of paragraph 3.]

[F5 (1A) In the case of a company which is not resident in the United Kingdom—

(a) businesses carried on and transactions entered into by it the profits of which are within the charge to corporation tax under Schedule A, and

(b) businesses carried on and transactions entered into by it the profits of which are [F6 the profits of a UK property business within the charge to income tax under Chapter 3 of Part 3 of ITTOIA 2005],

are treated [F7 for the purposes of those charges as separate businesses].]

(2) F8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) F9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F10 (3A) Subsection (1) applies for corporation tax purposes (and does not apply for income tax purposes except so far as necessary to ensure its application for corporation tax purposes by virtue of section 9).]

(4) Part II contains further provisions relating to the charge to tax under Schedule A [F11 and under Chapter 3 of Part 3 of ITTOIA 2005 (profits of a property business)].

Textual Amendments

F1 S. 15(1): Sch. A substituted (with effect in accordance with s. 38(2)(3) of the amending Act) by Finance Act 1998 (c. 36), s. 38(1), Sch. 5 para. 1 (with Sch. 5 para. 73)

F2 S. 15(1): words in Sch. A para. 1(4)(b) repealed (S.) (28.11.2004) by Abolition of Feudal Tenure etc. (Scotland) Act 2000 (asp 5), ss. 71, 77(2), Sch. 12 para. 50(2), Sch. 13 Pt. 1; S.S.I. 2003/456, art. 2

F3 S. 15(1): words in Sch. A para. 2(3) repealed (with effect in accordance with s. 79(3) of, and Sch. 23 to, the amending Act) by Finance Act 2002 (c. 23), s. 141, Sch. 40 Pt. 3(10)

F4 S. 15(1): words in Sch. A para. 2(3) substituted (with effect in accordance with s. 83(3) of the amending Act) by Finance Act 2002 (c. 23), s. 83(1)(b), Sch. 27 para. 2 (with Sch. 28)

F5 S. 15(1A) inserted (with effect in accordance with s. 38(2)(3) of the amending Act) by Finance Act 1998 (c. 36), s. 38(1), Sch. 5 para. 2 (with Sch. 5 para. 73)

F6 Words in s. 15(1A)(b) substituted (6.4.2005 with effect in accordance with s. 883(1) of the amending Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), Sch. 1 para. 8(2)(a) (with Sch. 2)

F7 Words in s. 15(1A) substituted (6.4.2005 with effect in accordance with s. 883(1) of the amending Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), Sch. 1 para. 8(2)(b) (with Sch. 2)

F8 S. 15(2) repealed (with effect in accordance with s. 38(2)(3) of the amending Act) by Finance Act 1998 (c. 36), s. 165, Sch. 27 Pt. 3(4)

F9 S. 51(3) repealed (with effect from 6.4.1988) by Finance Act 1988 (c. 39), s.148, Sch. 14 Part V, Note 1

F10 S. 15(3A) inserted (6.4.2005 with effect in accordance with s. 883(1) of the amending Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), Sch. 1 para. 8(3) (with Sch. 2)

F11 Words in s. 15(4) inserted (6.4.2005 with effect in accordance with s. 883(1) of the amending Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), Sch. 1 para. 8(4) (with Sch. 2)

Modifications etc. (not altering text)

C1 See—1970(M) s.19—information for purposes of Sch.Aand associated Sch.Dcharges.1990(C ) s.9(5)—manner of making allowances and charges.1990(C) s.67(3)—allowances in respect of leased assets employed for thermal insulation.1990(C) s.92—allowances in respect of dwelling houses let on assured tenancies.

C2 Ss. 15-17: Schs. A-C excluded (with effect in accordance with s. 230(3) of the excluding Act) by Finance Act 1994 (c. 9), s. 219(2)(b)(4) (with s. 220)

C3 S. 15(1): Sch. A para. 2(3) excluded (19.7.2006) by Finance Act 2006 (c. 25), s. 120(3)(4)

C4 S. 15(1): Sch. A para. 2(3) excluded (6.4.2008) by The Authorised Investment Funds (Tax) Regulations 2006 (S.I. 2006/964), reg. 69Z1(3) (as inserted by The Authorised Investment Funds (Tax) (Amendment) Regulations 2008 (S.I.2008/705), regs. 1, 5)

Marginal Citations

M1 SOURCE-1970(1)–(3)