Income Tax (Trading and Other Income) Act 2005 section 276A

Application of Chapter to property businesses using cash basis

Section 276A disapplies certain lease premium provisions for property businesses that calculate their profits using the cash basis.

• Property businesses using the cash basis cannot use the special spreading deductions normally available to tenants who pay a taxed lease premium.
• Under the accruals basis, tenants can spread a proportion of a lease premium as a deductible expense over the life of the lease — this relief does not apply under the cash basis.
• The related ICTA modification provisions are also disapplied for cash basis property businesses.
• This section has effect from the 2017-18 tax year onwards, when the cash basis was extended to property businesses.