Allowable expenses for property businesses

Produced by Tolley in association with of Crane Dale Tax, part of AMS Group

Owner-Managed Businesses

Guidance

Tax Returns

Allowable expenses for property businesses

Produced by Tolley in association with of Crane Dale Tax, part of AMS Group

Owner-Managed Businesses

Guidance

Tax Returns

This guidance note applies to companies and individuals with commercial or residential properties and shows the contrasts in treatment between the corporate and individual tax regimes.

General items

Many of the principles applying to allowable expenses for property businesses are similar to those that apply for trading and the rules for individuals in a property business are generally the same as for companies with some exceptions which are highlighted in the detailed sections below. See also PIM1106 which lists the trading income rules and associated legislative references.

One notable difference in allowable property expenses between individuals and companies is the treatment of interest expenses. Details of the rules for income tax purposes are included in the Deduction of interest against property income ― income tax rules guidance note and the corporation tax rules are set out in the Taxation of loan relationships guidance note.

Note that of the fixed rate deductions for expenses available for the self-employed carrying on trades, professions and vocations, only the fixed

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Rob Durrant-Walker

Tax Director at Crane Dale Tax , Corporate Tax, OMB, Personal Tax

Rob is a cross-tax advisor with a particular focus on property tax planning, and business structure planning for OMB’s. He provides tax advice to other accounting firms, balancing commerciality, ethics, and understanding complexity. His 30+ years of experience start at the Inland Revenue in Hull. After completing his ATT and CTA by 1999 with PKF, he subsequently worked at KPMG and UHY prior to managing the business tax team as a director at Garbutt + Elliott. Rob is now Tax Director at the independent tax consultancy, Crane Dale Tax. He is a regular author for Taxation magazine with many articles and Readers Forum contributions since 2005, and he contributes as a virtual member to the CIOT Property Tax technical committee. Rob works remotely from Vancouver in Canada.

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Allowable expenses for property businesses