Income Tax (Trading and Other Income) Act 2005 section 795

Alternative calculation of profits: introduction

Section 795 introduces the alternative method of calculating profits under the rent-a-room relief scheme, setting out the conditions that must be met before the alternative calculation rules in sections 796 to 798 can apply.

• The alternative profit calculation method is available as a second form of rent-a-room relief for qualifying individuals
• The individual's total rent-a-room income for the tax year must exceed their applicable limit for that year
• The individual must have made a valid election under section 800 to use the alternative calculation method
• When all three conditions are satisfied, sections 796 to 798 set out how profits are calculated under the alternative method