SolvedPIM1106 | Use of trading income rules: application of trading income rules: CT
From HM Revenue & Customs · Property Income Manual
Subsection (1) of S210 CTA09 provides that for corporation tax purposes the profits of a property business are calculated in the same way as the profits of a trade.
Subsection (2) applies specific rules in Part 3 of CTA09 to property businesses, which concern calculation of profits. They are:
| In Chapter 3 (basic rules) | Category | Manual |
|---|---|---|
| Section 46 | Generally accepted accounting practice | |
| Section 47 | Losses calculated on same basis as profits | BIM31000 onwards |
| Section 48 | Receipts and expenses | BIM31000 onwards |
| Section 49A | Money’s worth | BIM40051 |
| Section 52 | apportionment etc of profits and losses to accounting period |
| In Chapter 4 (rules restricting deductions) | Category | Manual |
|---|---|---|
| Section 53 | Capital expenditure | BIM35000 onwards |
| Section 54 | Expenses not wholly and exclusively for trade and unconnected losses | BIM37000 onwards |
| Section 55 | Bad debts | BIM42700 onwards |
| Sections 56 to 58B | Car hire | BIM47714 onwards |
| Section 59 | Patent royalties | BIM45965 |
| In Chapter 5 (rules allowing deductions) | Category | Manual |
|---|---|---|
| Section 61 | Pre-trading expenses | BIM46350 onwards |
| Section 69 | Payments for restrictive undertakings | BIM47005 |
| Sections 70 and 71 | Seconded employees | BIM47115 - BIM47120 |
| Section 72 | Payroll deduction schemes: contributions to agents' expenses | BIM45195 |
| Sections 73 to 75 | Counselling and retraining expenses | BIM47217 – BIM47218 |
| Sections 76 to 81 | Redundancy payments etc. | BIM47200 onwards |
| Sections 82 to 86 | Contributions to local enterprise organisations or urban regeneration companies | BIM47610 |
| Sections 87 and 88 | Scientific research | BIM45950 onwards |
| Sections 89 and 90 | Expenses connected with patents, designs and trade marks | BIM45950 onwards |
| Section 91 | Payments to Export Credits Guarantee Department | BIM45580 |
| Section 92 | Levies under the Financial Services and Markets Act 2000 | |
| Section 92A | Deductions in relation to salaried members of limited liability partnerships |
| In Chapter 6 (receipts) | Category | Manual |
|---|---|---|
| Section 93 | Capital receipts | BIM35002 |
| Section 94 | Debts incurred and later released | BIM40265 |
| Section 101 | Distribution of assets of mutual concerns | BIM24550 onwards |
| Section 102 | Industrial development grants | BIM40465 |
| Section 103 | Sums recovered under insurance policies etc. | BIM40750 onwards |
| Section 104 | Repayments under the Financial Services and Markets Act 2000 |
| In Chapter 7 (gifts to charities etc.) | Category | Manual |
|---|---|---|
| Section 108 | Receipt by donor or connected person of benefit attributable to certain gifts | BIM45180 |
| In Chapter 9 (other specific trades) | Category | Manual |
|---|---|---|
| Section 131 | incidental costs of issuing qualifying shares (building societies) | |
| Section 133 | annual payments paid by a credit union |
| In Chapter 12 (deductions from profits) | Category | Manual |
|---|---|---|
| Sections 172 to 175 | Unremittable amounts | BIM42750 |
Many other corporation tax calculation rules apply equally to property businesses, including (but not exclusively) the following:
| CTA09 Reference | Category | Manual |
|---|---|---|
| Sections 280-286 | Cessation of a UK property business | PIM3000 |
| Section 289 | Commencement and cessation of an overseas property business | |
| Sections 1149-1150 | Expenditure on remediation of contaminated land | CIRD60000onwards |
| Section 1238 | Retraining courses | BIM47080 |
| Section 1239 | Redundancy payments and approved contractual payments | BIM47200 onwards |
| Section 1288 | Unpaid remuneration | |
| Section 1298 | Business entertainment and gifts | BIM45000 onwards |
| Section 1304 | Crime-related payments | BIM43100 onwards |