Income Tax (Trading and Other Income) Act 2005 section 28

Items treated under CAA 2001 as receipts and expenses

Section 28 signposts the Capital Allowances Act 2001 rules that treat certain capital items as trading receipts or trading expenses when calculating the profits of a trade.

• The rules for calculating trading profits must be read alongside the Capital Allowances Act (CAA) 2001.
• Certain charges under CAA 2001 are treated as receipts (income) of a trade.
• Certain allowances under CAA 2001 are treated as expenses of a trade.
• These CAA rules override the normal prohibition on including capital items in the calculation of trading profits.