Part 3Property income
Chapter 3Profits of property businesses: basic rules
Calculation of profits
272BF1Meaning of “costs of a dwelling-related loan”
1
Subsections (2) to (5) apply for the purposes of section 272A.
2
“Dwelling-related loan”, in relation to a property business, means so much of an amount borrowed for purposes of the business as is referable (on a just and reasonable apportionment) to so much of the business as is carried on for the purpose of generating income from—
a
land consisting of a dwelling-house or part of a dwelling-house, or
b
an estate, interest or right in or over land within paragraph (a),
but see subsections (3) and (4).
3
Anything that in the course of a property business is done for creating (by construction or adaptation) a dwelling-house, or part of a dwelling-house, from which income is to be generated is, for the purposes of subsection (2), to be treated as done for the purpose mentioned in that subsection.
4
An amount borrowed for purposes of a property business is not a dwelling-related loan so far as the amount is referable (on a just and reasonable apportionment) to so much of the property business as consists of the commercial letting of furnished holiday accommodation.
5
“Costs”, in relation to a dwelling-related loan, means—
a
interest on the loan,
b
an amount in connection with the loan that, for the person receiving or entitled to the amount, is a return in relation to the loan which is economically equivalent to interest, or
c
incidental costs of obtaining finance by means of the loan.
6
Section 58(2) to (4) (meaning of “incidental costs of obtaining finance”) apply for the purposes of subsection (5)(c).
7
A reference in this section to a “dwelling-house” includes any land occupied or enjoyed with it as its garden or grounds.