Income Tax (Trading and Other Income) Act 2005 section 19

Tied premises

Section 19 deals with the tax treatment of income and expenses from premises that a trader owns or has an interest in, where those premises are occupied by another person who sells or uses goods supplied by the trader — most commonly applying to brewers who let premises to tied tenants.

• Where a trader supplies goods that are sold or used on premises occupied by another person, and the trader holds an interest in those premises, the rental income and property expenses are treated as part of the trade rather than as a separate property business.
• The trader's interest in the premises must be treated as an asset used for the purposes of the trade for this section to apply.
• Without this provision, the rental income and expenses would normally fall within the trader's property business; this section redirects them into the trading profit calculation instead.
• Where receipts or expenses relate to more than just the tied premises, or where only part of the premises meets the conditions, any necessary apportionment must be made on a just and reasonable basis.