Part 7Income charged under this Act: rent-a-room and qualifying care relief

Chapter 1Rent-a-room relief

Alternative calculation of profits if amount exceeds limit

796Alternative calculation of profits: trading income

(1)

This section applies if the individual has any rent-a-room receipts for the tax year which are the receipts of a trade.

(2)

The profits of the trade for the tax year are—

(a)

the sum of the amount of the rent-a-room receipts for the tax year arising from the trade and the amount of any relevant balancing charge, less

(b)

the deductible amount.

(3)

The deductible amount—

(a)

is L if all the individual's rent-a-room receipts for the tax year arise from the trade, and

(b)

otherwise, is—

L×TRmath

but, in either case, subject to a maximum of T.

(4)

In subsection (3)—

  • L is the individual's limit for the tax year,

  • T is the individual's rent-a-room receipts for the tax year arising from the trade, and

  • R is all the individual's rent-a-room receipts for the tax year.

(5)

In calculating the amount of any rent-a-room receipts for the purposes of this section, no deduction is allowed for expenses or any other matter.