Corporation Tax Act 2010 section 599

Calculation of profits

Section 599 sets out how profits of a property rental business must be calculated for the purposes of the REIT regime, including the treatment of loan relationships, derivative contracts, capital allowances and apportionment of mixed income and expenditure.

• Profits are calculated using the same rules as for a UK property business, but with loan relationship and derivative contract credits and debits included where they relate to the property rental business
• Capital allowances are given automatically in the profit calculation — there is no need to make a separate claim
• Items arising from share-based or unit trust-based derivative contracts are excluded from the profit calculation
• Income and expenditure that relates partly to property rental business and partly to other activities must be apportioned on a just and reasonable basis