|
| |
|
(4) | “The number of let days” for a tax year of any accommodation is the number |
| |
of days during the relevant period for which it is commercially let by the |
| |
person as holiday accommodation to members of the public. |
| |
(5) | Qualifying holiday accommodation may not be specified in more than one |
| |
| 5 |
(6) | An election for a tax year must be made on or before the first anniversary of the |
| |
normal self-assessment filing date for the tax year. |
| |
Separate profit calculations |
| |
327 | Capital allowances and loss relief |
| |
(1) | If a UK property business consists of both— |
| 10 |
(a) | the commercial letting of furnished holiday accommodation (“the |
| |
furnished holiday lettings part”), and |
| |
(b) | other businesses or transactions (“the other part”), |
| |
| this section requires separate calculations to be made of the profits of the |
| |
furnished holiday lettings part and the other part. |
| 15 |
(2) | The calculations must be made if— |
| |
(a) | section 248 or 249 of CAA 2001 (giving effect to allowances and |
| |
charges) applies to the furnished holiday lettings part or the other part, |
| |
| |
(b) | any provision of Chapter 1 of Part 10 of ICTA (loss relief) applies in |
| 20 |
relation to a loss made in either of those parts. |
| |
(3) | If there is a letting of accommodation only part of which is holiday |
| |
accommodation, such apportionments are to be made for the purposes of this |
| |
section as are just and reasonable. |
| |
328 | Earned income and relevant UK earnings for pension purposes |
| 25 |
(1) | If a UK property business consists of both— |
| |
(a) | the commercial letting of furnished holiday accommodation (“the |
| |
furnished holiday lettings part”), and |
| |
(b) | other businesses or transactions, |
| |
| this section requires a separate calculation to be made of the profits of the |
| 30 |
furnished holiday lettings part. |
| |
(2) | The calculation must be made if the profits of the furnished holiday lettings |
| |
| |
(a) | earned income under section 833(4)(c) of ICTA, or |
| |
(b) | income regarded as relevant UK earnings for pension purposes under |
| 35 |
section 189(2)(b) of FA 2004. |
| |
(3) | If there is a letting of accommodation only part of which is holiday |
| |
accommodation, such apportionments are to be made for the purposes of this |
| |
section as are just and reasonable. |
| |
|
| |
|
| |
|
| |
| |
Adjustment on change of basis |
| |
329 | Application of Chapter |
| |
(1) | This Chapter applies if— |
| 5 |
(a) | a person carrying on a UK property business changes, from one period |
| |
of account to the next, the basis on which profits of the business are |
| |
calculated for income tax purposes, |
| |
(b) | the old basis accorded with the law or practice applicable in relation to |
| |
the period of account before the change, and |
| 10 |
(c) | the new basis accords with the law and practice applicable in relation |
| |
to the period of account after the change. |
| |
(2) | The practice applicable in any case means the accepted practice in cases of that |
| |
description as to how profits of a UK property business should be calculated |
| |
| 15 |
(3) | Subsections (3) to (6) of section 227 (what is meant by a person changing the |
| |
basis on which profits are calculated) apply for the purposes of this section as |
| |
they apply for the purposes of that section (but as if any reference to a trade |
| |
were to a UK property business). |
| |
330 | Adjustment income and adjustment expense |
| 20 |
(1) | An amount by way of adjustment must be calculated in accordance with |
| |
section 231, which applies in relation to a UK property business as it applies in |
| |
| |
(2) | If the amount produced by the calculation is positive, it is treated as income |
| |
and charged to income tax under this Chapter. |
| 25 |
| It is referred to in this Chapter as “adjustment income”. |
| |
(3) | If the amount produced by the calculation is negative, a deduction is allowed |
| |
for it in calculating the profits of the business. |
| |
| It is referred to in this Chapter as an “adjustment expense”. |
| |
(4) | This section is subject to section 234 (no adjustment for certain expenses |
| 30 |
previously brought into account), which applies in relation to a UK property |
| |
business as it applies in relation to a trade. |
| |
| |
Tax is charged under this Chapter on the full amount of any adjustment |
| |
income arising in the tax year. |
| 35 |
| |
The person liable for any tax charged under this Chapter is the person |
| |
receiving or entitled to the adjustment income. |
| |
|
| |
|
| |
|
Treatment of adjustment income and adjustment expense |
| |
333 | Treatment of adjustment income |
| |
(1) | Adjustment income is treated as arising on the last day of the first period of |
| |
account for which the new basis is adopted. |
| |
(2) | But if there is a change of basis resulting from a tax adjustment affecting the |
| 5 |
calculation of any amount brought into account in respect of depreciation, |
| |
adjustment income is treated as arising only when the asset to which it relates |
| |
is realised or written off. |
| |
(3) | Adjustment income is treated for the purposes of Chapter 1 of Part 10 of ICTA |
| |
(loss relief) as profits of the UK property business for the tax year in which tax |
| 10 |
| |
334 | Treatment of adjustment expense |
| |
(1) | An adjustment expense is treated as an expense of the business arising on the |
| |
last day of the first period of account for which the new basis is adopted. |
| |
(2) | But if there is a change of basis resulting from a tax adjustment affecting the |
| 15 |
calculation of any amount brought into account in respect of depreciation, an |
| |
adjustment expense is treated as arising only when the asset to which it relates |
| |
is realised or written off. |
| |
| |
Rent receivable in connection with a UK section 12(4) concern |
| 20 |
Charge to tax on rent receivable in connection with a UK section 12(4) concern |
| |
335 | Charge to tax on rent receivable in connection with a UK section 12(4) concern |
| |
Income tax is charged on rent receivable in connection with a UK section 12(4) |
| |
| |
336 | Meaning of “rent receivable in connection with a UK section 12(4) concern” |
| 25 |
(1) | For the purposes of this Chapter rent is receivable in connection with a UK |
| |
section 12(4) concern if— |
| |
(a) | it is receivable in respect of an estate, interest or right in or over land in |
| |
| |
(b) | the estate, interest or right is used, occupied or enjoyed in connection |
| 30 |
with a concern listed in section 12(4). |
| |
(2) | For the purposes of this Chapter rent is also receivable in connection with a UK |
| |
section 12(4) concern if— |
| |
(a) | it is receivable in respect of an estate, interest or right in or over land in |
| |
| 35 |
(b) | the lease or other agreement under which it is receivable provides for |
| |
its recoupment by reducing royalties or payments of a similar nature, |
| |
| |
|
| |
|
| |
|
(c) | the reduction applies if the estate, interest or right is used, occupied or |
| |
enjoyed in connection with a concern listed in section 12(4). |
| |
(3) | In this Chapter “rent” includes— |
| |
(a) | a receipt mentioned in section 266(3), and |
| |
(b) | any other receipt in the nature of rent. |
| 5 |
| |
(1) | Tax is charged under this Chapter on the full amount of the profits arising in |
| |
| |
| |
section 339 (deduction for management expenses of owner of mineral |
| 10 |
| |
section 340 (relief in respect of mineral royalties). |
| |
| |
The person liable for any tax charged under this Chapter is the person |
| |
receiving or entitled to the rent. |
| 15 |
Management expenses of owner of mineral rights |
| |
339 | Deduction for management expenses of owner of mineral rights |
| |
(1) | This section applies if in a tax year— |
| |
(a) | a person lets a right to work minerals in the United Kingdom, and |
| |
(b) | the person pays a sum wholly and exclusively as an expense of |
| 20 |
management or supervision of the minerals in the tax year. |
| |
(2) | In calculating the amount of rent receivable in connection with a UK section |
| |
12(4) concern, a deduction is allowed for the sum for the tax year. |
| |
(3) | This is subject to section 340 (relief in respect of mineral royalties). |
| |
| 25 |
340 | Relief in respect of mineral royalties |
| |
(1) | This section applies if in a tax year— |
| |
(a) | a person who is UK resident, or ordinarily UK resident, is entitled to |
| |
receive mineral royalties under a mineral lease or agreement, and |
| |
(b) | the royalties are chargeable to tax under this Chapter. |
| 30 |
(2) | In calculating the amount of the royalties so chargeable, the person is treated |
| |
| |
(a) | entitled to receive only half of the total of the royalties arising under the |
| |
lease or agreement in the tax year, and |
| |
(b) | paying in the tax year only half of the total of the expenses mentioned |
| 35 |
in section 339(1)(b) (deduction for management expenses of owner of |
| |
| |
|
| |
|
| |
|
(3) | As to the meaning of “mineral lease or agreement” and “mineral royalties”, see |
| |
| |
341 | Meaning of “mineral lease or agreement” and “mineral royalties” |
| |
(1) | In this Chapter “mineral lease or agreement” means— |
| |
(a) | a lease, profit à prendre, licence or other agreement conferring a right |
| 5 |
to win and work minerals in the United Kingdom, |
| |
(b) | a contract for the sale, or a conveyance, of minerals in or under land in |
| |
| |
(c) | a grant of a right under section 1 of the Mines (Working Facilities and |
| |
Support) Act 1966 (c. 4) other than an ancillary right (within the |
| 10 |
| |
(2) | In this Chapter “mineral royalties” means so much of any rent receivable under |
| |
a mineral lease or agreement as relates to the winning and working of minerals. |
| |
(3) | For the purposes of this section and section 343 “minerals” means all minerals |
| |
and substances in or under land which are ordinarily worked for removal— |
| 15 |
(a) | by underground working, or |
| |
| |
| but excluding water, peat, top-soil and vegetation. |
| |
342 | Extended meaning of “mineral royalties” etc. in Northern Ireland |
| |
(1) | In the application of this Chapter to Northern Ireland references to mineral |
| 20 |
royalties include the following periodical payments. |
| |
| |
(a) | payments of compensation under section 29 or 35 of the Mineral |
| |
Development Act (Northern Ireland) 1969 (c. 35 (N.I.)) (“the 1969 Act”), |
| |
(b) | payments of compensation under section 4 of the Petroleum |
| 25 |
(Production) Act (Northern Ireland) 1964 (c. 28 (N.I.)) (“the 1964 Act”), |
| |
(c) | payments made as mentioned in section 37 of the 1969 Act, |
| |
(d) | payments made under section 55(4)(b) of the 1969 Act, and |
| |
(e) | payments made under section 11 of the 1964 Act (payments in respect |
| |
of minerals to persons entitled to a share of royalties under section 13(3) |
| 30 |
of the Irish Land Act 1903 (c. 37)). |
| |
(3) | In the application of this Chapter to Northern Ireland references to the mineral |
| |
lease or agreement under which mineral royalties are receivable include the |
| |
enactment under which those payments are made. |
| |
343 | Power of Board to determine what counts as “mineral royalties” |
| 35 |
The Board of Inland Revenue may by regulations— |
| |
(a) | provide whether, and to what extent, rents receivable under a mineral |
| |
lease or agreement which relate both to the winning and working of |
| |
minerals and to other matters are treated as mineral royalties, and |
| |
(b) | provide for treating the whole of such rents as mineral royalties if the |
| 40 |
extent to which they relate to matters other than the winning and |
| |
working of minerals is small. |
| |
|
| |
|
| |
|
| |
Rent receivable for UK electric-line wayleaves |
| |
Charge to tax on rent receivable for UK electric-line wayleaves |
| |
344 | Charge to tax on rent receivable for a UK electric-line wayleave |
| |
Income tax is charged on rent receivable for a UK electric-line wayleave. |
| 5 |
345 | Meaning of “rent receivable for a UK electric-line wayleave” |
| |
(1) | For the purposes of this Chapter rent is receivable for a UK electric-line |
| |
| |
(a) | it is receivable in respect of an easement, servitude or right in or over |
| |
land in the United Kingdom, and |
| 10 |
(b) | the easement, servitude or right is enjoyed in connection with an |
| |
electric, telegraph or telephone wire or cable. |
| |
(2) | The reference to the enjoyment of an easement, servitude or right in connection |
| |
with an electric, telegraph or telephone wire or cable includes (in particular) its |
| |
enjoyment in connection with— |
| 15 |
(a) | a pole or pylon supporting such a wire or cable, or |
| |
(b) | apparatus used in connection with such a wire or cable. |
| |
(3) | In this Chapter “rent” includes— |
| |
(a) | a receipt mentioned in section 266(3), and |
| |
(b) | any other receipt in the nature of rent. |
| 20 |
346 | Extent of charge to tax |
| |
(1) | Rent receivable for a UK electric-line wayleave is not chargeable to tax under |
| |
this Chapter for a tax year if— |
| |
(a) | a person carries on a UK property business in relation to some or all of |
| |
the land to which the wayleave relates, and |
| 25 |
(b) | receipts (other than rents receivable for UK electric-line wayleaves) in |
| |
respect of some or all of that land are brought into account in |
| |
calculating the profits of the business for the tax year. |
| |
(2) | In such a case, the rent receivable for the UK electric-line wayleave is brought |
| |
into account in calculating the profits of the person’s UK property business. |
| 30 |
(3) | The rules for determining whether an amount is chargeable to tax under this |
| |
Chapter also need to be read with section 22(2) (payments for wayleaves if |
| |
person carries on a trade). |
| |
(4) | That subsection secures that an amount which would otherwise be chargeable |
| |
to tax under this Chapter may be brought into account instead in calculating |
| 35 |
| |
| |
Tax is charged under this Chapter on the full amount of the profits arising in |
| |
| |
|
| |
|