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

Exclusion from relief: payments by close company

Section 783BP is an anti-avoidance provision that prevents an individual from claiming the property allowance where their property income includes payments from a close company in which they are a participator or associated with a participator.

• If any part of an individual's relevant property income for a tax year includes a payment made by or on behalf of a close company, no property allowance relief is available for that year.
• The restriction applies where the individual was either a participator in the close company or an associate of a participator at the time the payment was made.
• The terms "associate" and "participator" take their meanings from Part 10 of the Corporation Tax Act 2010.
• Where this exclusion applies, the individual loses the property allowance on all sources of property income, not just the income received from the close company.