Income Tax (Trading and Other Income) Act 2005 section 802

Minor definitions

Section 802 defines three key terms used throughout the rent-a-room relief chapter: "letting", "relevant allowance" and "relevant balancing charge".

• A "letting" is broadly defined to include not just formal tenancies but also licences to occupy a property.
• A "relevant allowance" is a capital allowance for plant or machinery used in a trade or letting that generates rent-a-room income, calculated under the capital allowances rules for the tax year in question.
• A "relevant balancing charge" is a balancing charge on plant or machinery used in a trade or letting that produces rent-a-room receipts, also calculated under the capital allowances rules for the relevant tax year.
• Both the relevant allowance and relevant balancing charge are determined under Part 2 of the Capital Allowances Act 2001, which governs plant and machinery allowances.