Part 3Property income

Chapter 3Profits of property businesses: basic rules

Apportionment of profits

275Apportionment etc. of profits to tax year

(1)

F1This section and sections 275A to 275C apply if a period of account of a property business does not coincide with a tax year.

(2)

Any of the following steps may be taken if they are necessary in order to arrive at the profits or losses of the tax year—

(a)

apportioning the profits or losses of a period of account to the parts of that period falling in different tax years, and

(b)

adding the profits or losses of a period of account (or part of a period) to profits or losses of other periods of account (or parts).

(3)

The steps must be taken by reference to the number of days in the periods concerned.

(4)

But the person carrying on the business may use a different way of measuring the length of the periods concerned if—

(a)

it is reasonable to do so, and

(b)

the way of measuring the length of periods is used consistently for the purposes of the business.

F2(5)

Sections 275A and 275B contain rules for the purpose of avoiding the need to apportion profits or losses under this section (and section 275C makes provision for the person carrying on the business to elect for those rules not to apply).