Income Tax (Trading and Other Income) Act 2005 section 275

Apportionment etc. of profits to tax year

Section 275 deals with how property business profits or losses are allocated to a tax year when the business's accounting period does not coincide with the tax year (6 April to 5 April).

• Where a property business's period of account does not match the tax year, profits or losses must be apportioned across the relevant tax years and, where necessary, combined with profits or losses from other periods or parts of periods.
• The default method of apportionment is on a time basis, calculated by reference to the number of days falling in each period.
• The business owner may use an alternative method of measuring the length of the periods, provided it is reasonable and applied consistently for the purposes of the business.
• The choice to adopt an alternative apportionment method rests solely with the taxpayer, not with HMRC.