Part 3

Property income
Chapter 3

Profits of property businesses: basic rules

Calculation of profits: other general rules

Meaning of “costs of a dwelling-related loan”
272B
1
Subsections (2) to (5) apply for the purposes of section 272A.
2
“
Dwelling-related loan
”, in relation to a property business, means so much of an amount borrowed for purposes of the business as is referable (on a just and reasonable apportionment) to so much of the business as is carried on for the purpose of generating income from—
a
land consisting of a dwelling-house or part of a dwelling-house, or
b
an estate, interest or right in or over land within paragraph (a),
but see
subsection (3)
.
3
Anything that in the course of a property business is done for creating (by construction or adaptation) a dwelling-house, or part of a dwelling-house, from which income is to be generated is, for the purposes of subsection (2), to be treated as done for the purpose mentioned in that subsection.
4. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5
“
Costs
”, in relation to a dwelling-related loan, means—
a
interest on the loan,
b
an amount in connection with the loan that, for the person receiving or entitled to the amount, is a return in relation to the loan which is economically equivalent to interest, or
c
incidental costs of obtaining finance by means of the loan.
6
Section 58(2) to (4) (meaning of “incidental costs of obtaining finance”) apply for the purposes of subsection (5)(c).
7
A reference in this section to a “
dwelling-house
” includes any land occupied or enjoyed with it as its garden or grounds.
S. 272A cross-heading inserted (16.11.2017) (with effect in accordance with Sch. 2 para. 64 of the amending Act) by Finance (No. 2) Act 2017 (c. 32), Sch. 2 para. 18
Ss. 272A, 272B inserted (18.11.2015) by Finance (No. 2) Act 2015 (c. 33), s. 24(2)
Words in s. 272B(2) substituted (for the purposes of income tax in relation to the tax year 2025-26 and subsequent tax years) by Finance Act 2025 (c. 8), Sch. 5 paras. 2(3)(a), 12(1) (with Sch. 5 paras. 15, 18(4), 19)
S. 272B(4) omitted (for the purposes of income tax in relation to the tax year 2025-26 and subsequent tax years) by virtue of Finance Act 2025 (c. 8), Sch. 5 paras. 2(3)(b), 12(1) (with Sch. 5 paras. 15, 18(4), 19)