Income Tax (Trading and Other Income) Act 2005 section 613

Application of trading income rules to non-trade businesses

Section 613 provides that the special allocation rules that normally apply to trades (found in Chapter 9 of Part 2 of the Act) also apply to non-trade businesses, with certain modifications.

• The trading income rules in Chapter 9 of Part 2 are extended to cover non-trade businesses as well as trades.
• Where those rules refer to a "basis period," this is read as meaning the tax year when applied to non-trade businesses.
• Any references to items not constituting trading stock of a trade are simply ignored in the context of non-trade businesses.
• Apart from these two adjustments, the rules operate in the same way for non-trade businesses as they do for trades.