Income Tax (Trading and Other Income) Act 2005 section 783BO

Exclusion from relief: payments by firm

Section 783BO is an anti-avoidance provision that prevents individuals from claiming the property allowance where their property income includes payments from a partnership in which they are involved.

• The property allowance is denied for the entire tax year if the individual's relevant property income includes a payment from a firm in which they are a partner or connected to a partner.
• This is an all-or-nothing rule: if even one source of property income comes from a firm the individual is connected with, no property allowance can be claimed on any source of property income for that year.
• The rule applies equally whether the payment is made directly by the firm or made on the firm's behalf by a third party.
• This provision works alongside a similar rule for close companies (section 783BP) and is consistent with equivalent restrictions that apply to the trading allowance.