Income Tax (Trading and Other Income) Act 2005 section 272

Application of trading income rules: GAAP

Section 272 identifies the specific trading income rules from Part 2 of the Act that apply when calculating the profits of a property business under Generally Accepted Accounting Practice (GAAP).

• Where a property business calculates its profits using GAAP, only a defined list of trading income rules from Part 2 apply, as imported by section 271E(1)
• The applicable rules cover basic profit calculation, restrictions on deductions, allowable deductions, receipts, gifts to charities, long funding leases, specific trades, and unremittable amounts
• Trading income provisions that are inherently incapable of applying to property income are excluded from the list, but provisions that are merely unlikely to apply are retained to cover unusual circumstances
• Any reference to "this Part" within the imported trading income provisions is read as referring both to those imported provisions and to the other provisions of Part 3 (property income)