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

Property allowance

Section 307G establishes that the calculation of property business profits is subject to the property allowance rules, which can provide relief on qualifying property income but in return disallow all related expense deductions.

• The normal rules for calculating property business profits are overridden by the property allowance provisions.
• The property allowance gives relief on relevant property income, such as rental income, up to £1,000 per tax year.
• Where the property allowance relief is claimed, all deductions for expenses relating to that property income are disallowed.
• Individuals must choose between claiming the property allowance or deducting actual expenses — they cannot benefit from both.