Income Tax (Trading and Other Income) Act 2005 section 307A

Cash basis: application of Chapter

Section 307A identifies which provisions in the Chapter apply exclusively to property businesses using the cash basis, and which provisions have a wider reach covering both current and former cash basis users.

• Sections 307B (capital expenditure), 307C (loan cost deductions) and 307D (modification of loan cost deductions) apply only where property business profits are calculated on the cash basis.
• Sections 307E and 307F deal with the treatment of capital receipts and apply both to property businesses currently using the cash basis and those that have used it in the past.
• The distinction matters because ceasing to use the cash basis does not remove the obligation to account for certain capital receipts under sections 307E and 307F.
• This section acts as a signposting provision, directing the reader to the correct rules depending on whether the property business is currently on the cash basis or has previously been on it.