Income Tax (Trading and Other Income) Act 2005 section 330

Adjustment income and adjustment expense

Section 330 explains how to calculate an adjustment amount for a UK property business and how the result is treated for income tax purposes, depending on whether it is positive or negative.

• The adjustment for a UK property business is calculated using the same method as for a trade (section 231).
• A positive adjustment is treated as taxable income ("adjustment income") and charged to income tax.
• A negative adjustment is an allowable deduction ("adjustment expense") when calculating the profits of the property business.
• No adjustment is made for certain expenses that have already been brought into account (section 234).