Corporation Tax Act 2009 section 262

Giving effect to positive and negative adjustments

Section 262 explains how adjustment amounts arising from a change of accounting basis in a UK property business are calculated, and how positive or negative adjustments are treated for corporation tax purposes.

• The adjustment amount is calculated using the same method that applies to trades (under section 182), applied to the UK property business
• A positive adjustment is treated as a taxable receipt arising on the first day of the first period of account under the new basis, unless it relates to depreciation, in which case it arises only when the asset is realised or written off
• A negative adjustment is treated as a deductible expense arising on the first day of the first period of account under the new basis, unless it relates to depreciation, in which case it arises only when the asset is realised or written off
• No adjustment is made for certain expenses that have already been brought into account, as provided by section 183