Income Tax (Trading and Other Income) Act 2005 section 4

Provisions which must be given priority over Part 2

Section 4 sets out the priority rules that apply when a receipt or other credit item could potentially fall within more than one charge to income tax, ensuring there is no double counting of the same income.

• Where income falls within both trading profits (Part 2) and UK property business profits (Part 3), the UK property business rules in Part 3 take priority.
• Where income falls within both Part 2 (trading and other income) and employment income, pension income or social security income under ITEPA 2003, the ITEPA 2003 rules take priority.
• These priority rules prevent the same receipt or credit item from being taxed under two different heads of charge at the same time.
• In practice, employment-related income, pension income and social security income will always be dealt with under ITEPA 2003 rather than as trading income, even if the item could technically fall under either heading.