F1PART 6AIncome charged under this Act: trading and property allowances

CHAPTER 2Property allowance

Basic definitions

783BA“Relevant property business” of an individual

(1)

Subject to subsection (3), for the purposes of this Chapter an individual's property business is a “relevant property business” for a tax year if the business is not a rent-a-room property business in relation to the individual for the tax year.

(2)

For the purposes of subsection (1) a property business is a “rent-a-room property business” in relation to an individual for a tax year if—

(a)

the individual qualifies for rent-a-room relief for the tax year, and

(b)

all the receipts which would, apart from Chapter 1 of Part 7 (rent-a-room relief), be brought into account in calculating the profits of the business, are rent-a-room receipts.

See section 783BQ for definitions relevant to this subsection.

(3)

If an individual receives—

(a)

property income distributions which are treated as profits of a UK property business by virtue of regulation 69Z18(1) or (2) of the AIF Regulations (property AIF distributions: liability to tax), or

(b)

distributions which are treated as profits of a UK property business by virtue of section 548(6) of CTA 2010 (REIT distributions: liability to tax),

that separate property business (see regulation 69Z18(6) of the AIF Regulations and section 549(5) of CTA 2010) is not a relevant property business of the individual.

(4)

In subsection (3) “the AIF Regulations” means the Authorised Investment Funds (Tax) Regulations 2006 (S.I. 2006/964).

783BB“Relievable receipts” of a property business

(1)

For the purposes of this Chapter, the “relievable receipts” of an individual's relevant property business for a tax year are all the amounts which would, apart from this Chapter, be brought into account as a receipt in calculating the profits of the business for the tax year.

This is subject to subsections (2) and (3).

(2)

If—

(a)

the individual qualifies for rent-a-room relief for the tax year, and

(b)

the individual has rent-a-room receipts for the tax year which would, apart from Chapter 1 of Part 7, be brought into account in calculating the profits of the property business,

the rent-a-room receipts are not relievable receipts of the business.

(3)

Non-relievable balancing charges in respect of the property business for the tax year are not relievable receipts of the business.

(4)

In subsection (3) “non-relievable balancing charges”, in respect of a property business for a tax year, means balancing charges falling to be made for the tax year under Part 2 of CAA 2001 which do not relate to a business or transaction which is carried on, or entered into, for the purpose of generating receipts which are relievable receipts of the property business.

783BCThe individual's “relevant property income”

For the purposes of this Chapter, an individual's “relevant property income” for a tax year is the relievable receipts for the tax year of the individual's relevant property businesses for the tax year.

783BDThe individual's property allowance

(1)

For the purposes of this Chapter, an individual's property allowance for a tax year is £1,000.

(2)

The Treasury may by regulations amend subsection (1) so as to substitute a higher sum for the sum for the time being specified in that subsection.