Income Tax (Trading and Other Income) Act 2005 section 271B

Calculation of profits in accordance with GAAP

Section 271B defines what it means to calculate the profits of a property business in accordance with generally accepted accounting practice (GAAP), and clarifies the limits of that requirement.

• Property business profits must be calculated using GAAP, subject to any adjustments required or authorised by income tax law
• The requirement to use GAAP relates only to the basis of calculation — it does not require compliance with Companies Act 2006 requirements more broadly
• No audit or disclosure obligations are imposed by this requirement
• Where profits are calculated using GAAP, section 272 applies trading income rules to those calculations