Income Tax (Trading and Other Income) Act 2005 (c. 5)

[F1 PART 6A U.K. Income charged under this Act: trading and property allowances

Textual Amendments

F1 Pt. 6A inserted (16.11.2017) (with effect in accordance with Sch. 3 para. 13 of the amending Act) by Finance (No. 2) Act 2017 (c. 32), Sch. 3 para. 1

CHAPTER 2 U.K. Property allowance

Relief if relevant property income exceeds property allowance U.K.

783BG Partial relief: alternative calculation of property profits: introduction U.K.

An individual qualifies for partial relief for a tax year if—

(a) the individual has relevant property income for the tax year,

(b) the relevant property income exceeds the individual's property allowance for the tax year, and

(c) an election by the individual under section 783BK has effect for the tax year (election for partial relief).

783BH Partial relief: alternative calculation of property profits U.K.

(1) If an individual qualifies for partial relief for a tax year, this section applies in relation to the calculation of the profits of the individual's relevant property business for the tax year or, where the individual's relevant property income for the tax year consists of the relievable receipts of two relevant property businesses, the profits of each property business for the tax year.

(2) The relievable receipts of the property business for the tax year are brought into account.

(3) No relevant expenses are brought into account.

(4) The deductible amount is brought into account.

(5) Subject to section 783BI, the deductible amount is equal to the individual's property allowance for the tax year.

(6) In subsection (3) “relevant expenses” means all the amounts—

(a) which would, apart from this section, be brought into account as a deduction in calculating the profits of the business for the tax year, and

(b) which are associated with the relievable receipts.

783BI Deductible amount: splitting of property allowance U.K.

(1) This section applies where the individual's relevant property income for the tax year consists of the relievable receipts of two relevant property businesses.

(2) The references in section 783BH to the deductible amount are to amounts which, in total, equal the individual's property allowance for the tax year.

(3) The question of how to allocate the individual's property allowance for the tax year for the purposes of subsection (2) is to be decided by the individual, subject to subsection (4).

(4) The deductible amount in respect of a relevant property business must not be such as to result in a loss of the business.]