Chapter 6Supplementary provisions
Giving effect to allowances and charges
391Trades
An allowance or charge to which a person is entitled or liable under this Part is to be given effect in calculating the profits of that person’s trade, by treating—
(a)the allowance as an expense of the trade, and
(b)the charge as a receipt of the trade.
392Schedule A businesses
(1)This section applies if a person who is entitled or liable to an allowance or charge for a chargeable period was not carrying on a trade in that period.
(2)If the person was carrying on a Schedule A business at any time in that period, the allowance or charge is to be given effect in calculating the profits of that business, by treating—
(a)the allowance as an expense of that business, and
(b)the charge as a receipt of that business.
(3)If the person was not carrying on a Schedule A business at any time in that period, the allowance or charge is to be given effect by treating him as if he had been carrying on such a business in that period and as if—
(a)the allowance were an expense of that business, and
(b)the charge were a receipt of that business.
Meaning of “freehold interest”, “lease” etc.
393Meaning of “freehold interest”, “lease”, etc.
(1)In this Part “freehold interest in land” means—
(a)the fee simple estate in the land, or
(b)in relation to Scotland, the interest of the owner.
(2)In this Part “freehold interest in land” also includes—
(a)an agreement to acquire the fee simple estate in the land, or
(b)in relation to Scotland, an agreement to acquire the interest of the owner.
(3)In this Part “lease” includes—
(a)an agreement for a lease if the term to be covered by the lease has begun, and
(b)any tenancy,
but does not include a mortgage (and “lessee”, “lessor” and “leasehold interest” are to be read accordingly).
(4)In the application of this Part to Scotland—
(a)“leasehold interest” means the interest of a tenant in property subject to a lease, and
(b)any reference to an interest which is reversionary on a leasehold interest or on a lease is to be read as a reference to the interest of the landlord in the property subject to the leasehold interest or lease.