(1)If a person who is entitled or liable to an allowance or charge for a chargeable period 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.
(2)If a person who is entitled or liable to an allowance or charge for a chargeable period 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.
(1)If the sum paid for the sale of the relevant interest in a building is attributable—
(a)partly to assets representing expenditure for which an allowance can be made under this Part, and
(b)partly to assets representing other expenditure,
only so much of the sum paid as on a just and reasonable apportionment is attributable to the assets referred to in paragraph (a) is to be taken into account for the purposes of this Part.
(2)Subsection (1) applies to other proceeds from a balancing event in respect of a building as it applies to a sum given for the sale of the relevant interest in the building.
(3)Subsection (1) does not affect any other provision of this Part requiring an apportionment of the proceeds of a balancing event.
(1)In this Part “dwelling-house” has the same meaning as in the Rent Act 1977 (c. 42).
(2)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).
(3)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.