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

Profits of a property business: application of trading income rules

Section 271E establishes that the profits of a property business are calculated using the same rules that apply to trading profits, subject to certain limitations depending on the accounting method used.

• Property business profits are calculated in the same way as trading profits
• Where profits are calculated using Generally Accepted Accounting Practice (GAAP), section 272 sets out which trading income rules apply
• Where profits are calculated on the cash basis, section 272ZA sets out which trading income rules apply
• The applicable trading income rules are drawn from Part 2 of the Income Tax (Trading and Other Income) Act 2005